By Jonathan Stempel
April 28 (Reuters) - The U.S. Securities and Exchange
Commission has fined Seattle-based Coinme and related defendants
nearly $4 million for conducting an unregistered and misleading
offering of a crypto asset called UpToken.
Friday's settlement resolves claims that Coinme's Up Global
unit and Neil Bergquist, who led both entities, misled investors
in a late 2017 initial coin offering for UpToken, which was
issued on the Ethereum blockchain.
The SEC said investors were led to believe Up Global would
limit the supply of UpToken, while Coinme would create constant
demand for UpToken to fund a bitcoin automated teller machine
rewards program, helping boost UpToken's price.
According to the regulator, the claims were misleading
because Up Global had quietly conducted transactions that
reduced Coinme's need for UpToken.
It also said Up Global and Bergquist falsely told investors
that the offering raised $10 million to $18.9 million despite
knowing that it actually raised much less, $3.65 million.
Without admitting or denying wrongdoing, Coinme and Up
Global will pay a combined $3.77 million, while Bergquist will
pay $150,000. Bergquist, 35, also received a three-year ban from
being an officer or director of public companies.
Coinme did not immediately respond to requests for comment.
The SEC has been cracking down on cryptocurrency markets
since Gary Gensler became its chair in 2021.
Gensler told the House Financial Services Committee on April
18 that crypto markets were "rife with noncompliance" that put
investors at risk and undermined public trust in capital
markets.
(Reporting by Jonathan Stempel in New York; Editing by Daniel
Wallis)
Messaging: jon.stempel.thomsonreuters.com@reuters.net))
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