Virtual Currency
Coinme Inc.Information and Alerts
Alert Details
This business has 1 alert.
Government Actions
State of North Carolina Wake County in a Matter before the Commissioner of Banks Docket No. 23:002:MT
The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.
On January 25, 2023, the State of North Carolina, Wake County, in a Matter Before the Commissioner of Banks, Docket No 23:002:MT in regard to Coinme Inc, NMLS ID 1185542 issued an Order Summary Suspension and Cease and Desist Order and Order Amending Summary Suspension and Cease and Desist Order. The effective date of the Order was amended to February 1, 2023.
Coinme is the subject of a multi-state examination that began in August of 2022. The examination remains open.
According to the Order, Coinme’s volume as reported on its 2022 third quarter Money Service Business Call Report filed through the Nationwide Multistate Licensing System (NMLS) included 5,067 customer virtual currency transactions totaling the US Dollar equivalent of $2,774,083. Pursuant to N.C.G.S. § 53-208.46(a), licensed money transmitters shall maintain at all times a net worth of not less than $250,000 calculated in accordance with generally accepted accounting principles. Upon reviewing the financial documents provided during the examination, NCCOB determined that Coinme has not maintained at all times sufficient net worth. Net worth as of August 31, 2022, was below the minimum required amount. On October 5, 2022, NCCOB requested that Coinme provide documentation to review its capital growth and show compliance with N.C.G.S. § 53- 208.46(a). Coinme indicated that its net worth would be more than $250,000 by on or about October 31, 2022; however, it reported significant losses during the month of September. On October 20, 2022, Coinme provided NCCOB with an unaudited balance sheet and profit and loss statement that indicated its net worth was more than $250,000 as of September 30, 2022. On December 16, 2022, Coinme provided NCCOB with an updated unaudited balance sheet and profit and loss statement that indicated its net worth was significantly below $250,000 during the month of October 2022. Pursuant to N.C.G.S. § 53-208.57(d), the Commissioner may issue a cease and desist or summary suspension order if she has reason to believe that such a violation or failure to comply with the MTA presents an imminent threat to the public. 1Coinme’s inability to continually maintain sufficient net worth puts North Carolina consumers at risk.
As a result of the Order, pursuant to N.C.G.S. §§ 53-208.46(a) and 53-208.57(d), the money transmitter license of Coinme, previously issued, is hereby SUMMARILY SUSPENDED. Coinme shall cease and desist from conducting any money transmission activity within the State of North Carolina. Coinme is permitted, for a period of six (6) months from the effective date of this Order, to engage in limited money transmission activities solely for the purpose of winding down its North Carolina operations and resolving its consumer obligations received prior to the effective date of this order.
As of the effective date of this Order, no new money transmission activities or new transmission business shall be conducted under Coinme’s MTA license within the State of North Carolina. Within ten (10) days of the effective date of the Order and each successive month end, Coinme shall furnish a list of all its North Carolina consumers with outstanding transmission obligations and the dollar amount of those obligations to Chief Deputy Commissioner of Banks Stephanie White via secure electronic transmission method. Within six (6) months of the effective date of this Order, Coinme shall cease all its money transmission operations and sell or transfer its money transmission activity to another North Carolina licensed money transmitter. With written approval from the Commissioner, Coinme may be granted an extension for ceasing operations. Any request for an extension must be submitted in writing to Chief Deputy Commissioner of Banks Stephanie White before the deadline provided in the preceding paragraph. Pursuant to N.C.G.S. § 53-208.57(b), Coinme may request a hearing regarding the issuance of this Order within twenty (20) days of its effective date. Such a request shall be made in writing to Angela Maynard at and a hearing shall be calendared within fifteen (15) days thereafter or at such time as may be agreed upon by the parties. If Respondent does not request a hearing, this Order shall remain in full force and effect until such time as it is modified or vacated by the Commissioner.
For more information, please contact the State of North Carolina Office of the Commissioner on Banks at https://nccob.nc.gov/ or 919-733-3016.
Important Information
Government Actions
The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.
On April 28, 2023, The Securities and Exchange Commission 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 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.
For more information, please contact the Securities and Exchange Commission at https://www.sec.gov/contact-information/sec-directory or (800) SEC-0330 or (202) 551-6551. https://www.sec.gov/enforce/33-11179-s
Service Area
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