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Coinme, Subsidiary and CEO Fined $4M by SEC Over UpToken Offering
The bitcoin kiosk company, its subsidiary Up Global and the CEO of both entities were accused of conducting "unregistered offers and sales of securities."
Updated May 1, 2023, 2:32 p.m. Published May 1, 2023, 9:08 a.m.
Bitcoin kiosk company Coinme has agreed to pay nearly $4 million to settle charges by the U.S. Securities and Exchange Commission alleging it was party to an unregistered security offering, the regulator announced Friday.
Coinme, its subsidiary Up Global SEZC and the CEO of both entities, Neil Bergquist, were all named in the order for allegedly running a crypto fundraiser known as an initial coin offering (ICO) in 2017 for "UpToken." The SEC accused the parties of "making false and misleading statements concerning the demand for UpToken and the amount raised in the offering."
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The order is the latest in a string of enforcement actions and heavy fines by the securities regulator that has forced some firms to shutter all or part of their operations.
The SEC alleged Bergquist and Up Global worked to obtain UpToken supply "that would substantially reduce Coinme's need to purchase UpToken" following the ICO, leading to "publicly inflated amounts raised."
To settle the charges, Up Global agreed to pay a $3,520,000 penalty, while Coinme agreed to pay a separate $250,000 penalty and Bergquist agreed to pay $150,000, according to the regulator.
"The SEC order also bars Bergquist, for a period of three years, from acting as an officer or director of a public company," the announcement said.
Coinme has bitcoin ATMs in around 49 U.S. states and added a range of popular crypto tokens to its grocery store kiosks in August.
CoinDesk has reached out to Coinme for comment.
Read more: Bittrex Global CEO Says Firm Will Fight SEC Charges, Did Not Serve U.S. Customers
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CFTC Launches Digital Assets Pilot Allowing Bitcoin, Ether and USDC as Collateral
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