The Us Securities And Exchange Commission (Sec) Today Announced The Settlement Of Claims Against The Poloniex Cryptocurrency Exchange. The Company Agreed To Collect $ 10 Million For Servicing “An Unregistered Online Digital Asset Exchange In Connection With The Management Of A Trading Platform On Which Securities In The Form Of Digital Assets Were Bought And Sold.”
As Established By The Sec, From July 2017 To November 2019, When The Poloniex Platform Was Sold To A New Owner, The Company Carried Out Transactions With Various Digital Assets, Among Which Were Investment Contracts, And Therefore Securities.
The Regulator Also Found That The Poloniex Trading Platform Met The Definition Of An “exchange” Under Securities Laws By Providing Traders With A Web Interface, An Order Book, And A Trading Engine For Executing Trades. At The Same Time, Poloniex Was Available To American Investors, But It Was Not Registered As A National Stock Exchange And Was Not Subject To Exceptions.
In Addition, It Turned Out That In August 2017, Poloniex Employees Internally Decided To “Aggressively” Increase The Number Of Digital Assets Available For Trading On The Platform, Even If They Include Securities, In Order To Increase Their Market Share.
“Poloniex has opted for higher returns over complying with federal securities laws by adding digital asset securities to its platform,” said Christina Littman, Cyber Enforcement Officer at the SEC. “Poloniex tried to bypass the SEC’s regulatory regime that applies to all markets that bring together buyers and sellers of securities, regardless of the technology used.”
Poloniex Agreed To Comply With The Immediate Cessation Of Illegal Activities And Pay $ 8,484,313 In Return Of Misappropriated Property, $ 403,995 In Interest Pending Judgment, And $ 1.5 Million In Fines.