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SEC Charges CEO and Subsidiary of Seattle-Based Company with Securities Fraud

April 28, 2023

File No. 3-21398

April 28, 2023 - The Securities and Exchange Commission today announced settled charges against Seattle-based company Coinme Inc., its subsidiary Up, Global SEZC, and the Chief Executive Officer of both entities, Neil Bergquist, for conducting unregistered offers and sales of securities in the form of a crypto asset called "UpToken," and against Bergquist and Up Global for making false and misleading statements concerning the demand for UpToken and the amount raised in the offering.

According to the order, from October 16, 2017 to December 15, 2017, Coinme, Up Global, and Bergquist engaged in unregistered offers and sales of crypto asset securities during which, among other things, they marketed the financial benefit that UpToken investors would reap from Coinme purchasing UpToken in the secondary market after the ICO. The order also finds that, unbeknownst to UpToken investors, Bergquist and Up Global took steps before and throughout the ICO to obtain an UpToken supply that would substantially reduce Coinme's need to purchase UpToken after the ICO, and also knowingly or recklessly publicly inflated amounts raised in the ICO.

The SEC's order finds that Coinme, Up Global, and Bergquist violated Sections 5(a) and 5(c) of the Securities Act of 1933, and that Bergquist and Up Global violated Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Coinme, Up Global, and Bergquist agreed, without admitting or denying the SEC's findings, to settle the charges, cease and desist from future violations of those provisions, and comply with certain undertakings. In addition, Up Global agreed to pay a $3,520,000 penalty, for which Coinme is liable on a joint-and-several basis; Coinme agreed to pay a separate $250,000 penalty; and Bergquist agreed to pay a penalty of $150,000. The SEC order also bars Bergquist, for a period of 3 years, from acting as an officer or director of a public company.

The SEC's investigation was conducted by Michael Ellis and Serafima McTigue and was supervised by Steven Buchholz, Jorge G. Tenreiro and David Hirsch of the Enforcement Division's Crypto Assets and Cyber Unit, and Hane L. Kim of the Enforcement Division's Retail Strategy Task Force. Douglas Smith of the SEC's New York Regional Office assisted with the investigation. The SEC appreciates the assistance of the State of Washington Department of Financial Institutions.

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