uptoken (up) price Crypto exchange Coinme has been fined $4 million for violating US laws in its Uptoken ICO, after the US SEC fined the crypto ATM operator.
The Securities and Exchange Commission (SEC) arrested Coinme, its subsidiary Up Global SEZC, and Neil Bergquist, CEO of both firms, for offering unregistered securities and making “misleading statements” on its crypto token UpToken (UP).
The parties agreed to pay the fine
Up Global and Coinme were fined $3.52 million, which Up Global agreed to pay.
The SEC separately imposed fines against Bergquist and Coinme of $150,000 and $250,000, respectively, which both agreed to pay.
According to the SEC, UpToke’s (UP) initial coin offering (ICO) conducted between October and December 2017 was an investment contract under the Howey test and was, therefore, an unregistered security offering rather than an ICO.
coinme btc atm
ICO raises $3.6M to expand Coinme fleet bitcoin (btc) ATM. And of course, Coinme added 30 more ATMs using the funds raised from the ICO. However, the SEC said Up Global and Bergquist made “false and misleading statements” regarding the amounts raised in the UpToken solicitation and offering.
According to SEC:
“Bergquist and Up Global took steps prior to the ICO and throughout the ICO to obtain the UpToken supply, which will substantially obviate the need for Coinme to purchase UpToken for the post-ICO ATM rewards program.”
The SEC said Coinme sent 160 BTC, worth more than $1 million at the time, to an Up Global wallet that was used to receive investors’ funds during the ICO. Up Global sent back approximately 14.5 million UP tokens to Coinme at a discount. This transaction, according to the SEC, “intentionally or recklessly” created the impression that a whale had made a large UP purchase.
Uptoken holders received benefits such as 1% cashback in UP tokens and discounted fees when using Coinme’s ATMs.
In January 2019, Coinme partnered with Coinstar to use their cash-counting ATMs to facilitate cash-to-crypto transactions. As of July 2019, Coinme had shut down all of its native BTC ATMs; something after which Coinme stated that the use of Uptoken had expired and that Uptoken holders were not eligible for the previously described benefits.
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