SEC Slaps Nearly $4 Million Fine on Coinme for Alleged Misleading ICO Practices

The Big Bust: Coinme’s $4 Million Oops

In a move that sent ripples through the crypto community, the Securities and Exchange Commission (SEC) dropped a hefty $4 million fine on Coinme. This penalty isn’t just pocket change; it involves allegations of offering unregistered securities and making statements that could easily be confused with those found in fiction novels.

SEC Sues: The Players

On April 28, 2023, the SEC announced it had reached a settlement with Coinme, its sibling company Up Global SEZC, and the notorious CEO Neil Bergquist. The total fines included a whopper of $3.52 million from Up Global alone, with Bergquist and Coinme receiving their own individual penalties of $250,000 and $150,000, respectively. You can almost hear the coins clinking in their distant wallets!

The ICO That Didn’t Quite Make the Cut

According to the SEC, the initial coin offering (ICO) back between October and December 2017 was what we call an investment contract, hence it was subject to registration—something Coinme and Up Global failed to do. The ICO raised approximately $3.6 million with plans to expand Coinme’s fleet of Bitcoin ATMs. Funny how that plan didn’t quite pan out.

Cash in, Cash Out: Where is UpToken Now?

Fast forward to 2019, Coinme decided to switch gears, partnering with Coinstar instead of expanding their ATM game. All their ATMs were shut down—talk about a plot twist! As for UpToken? Well, let’s just say it’s been collecting dust. The SEC remarked, “There is currently no use for UpToken,” which is a nice way of saying it’s about as useful as a chocolate teapot.

Demand? What Demand?

The SEC also laid down the law on what they claimed were false statements made by Bergquist and Up Global regarding the demand for UpToken during the ICO. They asserted that both parties had been playing a deceptive game, inflating the demand for UP while essentially pulling the rug out from under it. It’s like claiming your homemade cookies will be a hit, only to serve them to empty chairs.

The Legal Aftermath

Though Bergquist didn’t admit any wrongdoing—classic legal move—he did agree to settle and has been barred from being an executive at any public company for three long years. It’s safe to say that after these dramatic events, Coinme’s future looks as uncertain as a cat trying to swim!

What’s Next for Coinme?

As the dust settles, many are left wondering what this could mean for Coinme and the broader crypto market. Will they rise like a phoenix from the ashes? Or will they be just another cautionary tale in the world of crypto? Only time will tell, but one thing’s for sure: People will be watching.