SEC fined Poloniex $10 million for operating an unregistered online crypto exchange

The Securities and Exchange Commission (SEC) announced that Poloniex LLC has agreed to pay more than $10 million to settle charges for operating an unregistered online crypto exchange in connection with its operation of a trading platform that facilitated buying and selling of crypto-asset securities.


Source: SEC

SEC hits crypto exchange Poloniex with $10 million fine

SEC fined cryptocurrency exchange Poloniex $10 million for operating an unregistered online digital asset exchange. Poloniex agreed to pay the fine without admitting or denying the SEC filings.

Founded in 2014, Poloniex was purchased by Circle in 2018 for $400 million. At the end of 2019, the company spun off, forming a new company called Polo Digital Assets. Meanwhile, Tron’s founder, Justin Sun, is leading the consortium to acquire it.

The SEC’s action focuses on the time frame from July 2017 to November 2019, up to the time of the sale. The SEC claims the exchange sold cryptocurrency as securities – even though the exchange did not register.

The statement states that the exchange wants to be aggressive in adding new tokens, even those that can be considered securities.

“Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,” said Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit. “Poloniex attempted to circumvent the SEC’s regulatory regime, which applies to any marketplace for bringing together buyers and sellers of securities regardless of the applied technology.”

In a regulatory filing in July, Circle said it had set aside more than $10 million to guard against SEC complaints. In March, it offered to settle the case for $10.4 million.

The exchange is now registered with SEC, stating, “Poloniex LLC is regulated by the U.S. Security and Exchange Commission and incorporated in the state of Montana.”

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