• The US Securities and Exchange Commission (SEC) has fined Coinme $4 million over its initial coin offering (ICO) of UpToken.
• The SEC believes that Coinme’s offer of unregistered securities to crypto investors and traders was “misleading,” necessitating the fine.
• The SEC remains vigilant in its enforcement efforts and is willing to take action against companies that violate securities laws.
US SEC Fines Coinme $4 Million
The US Securities and Exchange Commission (SEC) has served a $4 million fine to Coinme over its initial coin offering (ICO) of UpToken. Based on the SEC’s order, the UPToken ICO, which Coinme and its subsidiary conducted from October 2017 to December 2017, was an investment contract based on the Howey test.
Misleading Offerings of Unregistered Securities
The SEC also believes that the company’s offer of unregistered securities to crypto investors and traders was “misleading,” necessitating the fine. SEC Serves Coinme $4 Million In Fines Recently, the SEC stated that Coinme’s misleading marketing strategy violated securities laws as Coinme did not register the tokens as securities, and the company did not qualify for an exemption from registration requirements. According to the SEC’s filing, the company raised about $3.6 million from its initial coin offering. This amount was to fund the expansion of the company’s Bitcoin ATMs. Notably, the firm added 30 ATMs using the funds generated from the ICO.
Penalties For CEO And Subsidiary Firm
The charges from the SEC also extended to the company’s CEO, Neil Bergquist, and their subsidiary firm Up Global SEZC. Aside from a estimated $4 million penalty on Coinme and Bergquist; there is a separate penalty against them: a $250,000 and $150,000 fine respectively Both parties have agreed to pay all fines and desist from further violations of securities laws.
Crypto Investors Entitled To Truthful Disclosures
The SEC believes that crypto investors are entitled to truthful disclosures from issuers of securities whether digital or otherwise As such;Coinmes misleading marketing tactics deprived investors of essential information preventing them from making informed investment decisions
SEC Remains Vigilant In Its Enforcement Efforts
SEC has recently been cracking down on fraudulent ICOs & unregistered securities offerings This latest action against Coinme shows that regulator remains vigilant in its enforcement efforts & is willing to take action against companies that violate securities laws