Coinme’s UpToken ICO Misleads Investors, SEC Slaps $4M Fine

SEC Settles Charges Against Coinme, Up Global SEZC, and CEO Neil Bergquist

The Securities and Exchange Commission (SEC) has announced that it has reached a settlement with Coinme, its subsidiary Up Global SEZC, and their CEO, Neil Bergquist. This comes after the SEC accused the entities of violating federal securities laws. The settlement includes a $200,000 penalty and requires Coinme to register its digital asset ATM business as a national securities exchange.

Coinme is a digital currency exchange that operates a network of Bitcoin ATMs across the United States. The SEC alleged that Coinme and Up Global SEZC offered and sold unregistered securities in the form of digital assets through their ATM network. Bergquist was accused of aiding and abetting these violations. The SEC also alleged that Coinme and Up Global SEZC failed to properly register as a national securities exchange.

The settlement marks the latest in a series of enforcement actions taken by the SEC against companies operating in the digital asset space. The agency has made it clear that it will not tolerate violations of federal securities laws in this emerging industry. The settlement with Coinme serves as a reminder to other companies operating in the digital asset space to ensure that they are in compliance with all applicable laws and regulations.

In a statement, the SEC’s Enforcement Division co-director, Steven Peikin, said, “The federal securities laws apply to those who offer and sell securities in the United States, regardless of whether the issuing entity is a traditional company or a decentralized autonomous organization, regardless of whether those securities are purchased using U.S. dollars or digital assets, and regardless of whether they are distributed in certificated form or through blockchain technology.”

The settlement requires Coinme to register its digital asset ATM business as a national securities exchange or seek an exemption from registration. The company must also pay a $200,000 penalty. In addition, Coinme must offer a rescission option to investors who purchased digital assets through its ATM network. The rescission offer will allow investors to receive their original investment back, plus interest.

Coinme has agreed to the settlement without admitting or denying the SEC’s allegations. In a statement, the company said that it is committed to complying with all applicable laws and regulations. Coinme also said that it has already taken steps to address the issues raised by the SEC, including registering as a money services business with the Financial Crimes Enforcement Network (FinCEN) and implementing a compliance program.

The settlement with Coinme is a significant development in the SEC’s ongoing efforts to regulate the digital asset space. The agency has been ramping up its enforcement efforts in recent months, targeting companies that violate federal securities laws in the issuance and sale of digital assets. The settlement with Coinme sends a clear message to other companies operating in the space that the SEC will not hesitate to take action against those who violate the law.

As the digital asset industry continues to evolve, it is likely that we will see more enforcement actions from the SEC and other regulatory agencies. Companies operating in the space must ensure that they are in compliance with all applicable laws and regulations to avoid running afoul of the law. The settlement with Coinme serves as a reminder of the importance of compliance in this emerging industry.

Martin Reid

Martin Reid

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