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According to SEC officials, Poloniex and its employees operated the trading platform by prioritizing profits over compliance.\u00a0<\/p>\n<\/div>\n
Poloniex, a digital asset trading platform has agreed to a cease and desist order from the United States Securities and Exchange Commission (<\/span>SEC<\/span><\/a>) and is also set to pay over $10 million in settlements for charges against the operation of an unregistered exchange. According to the order as contained in a <\/span>Press Release<\/span><\/a> from the SEC, Poloniex did not agree to the charges and neither denied it.<\/span><\/p>\n Known for its clampdown on several financial market players that contravenes the US securities law, the SEC has not spared crypto-based entities in the past decade. The charge on Poloniex and the SEC probe into the company dates back to the period between July 2017 through November 2019 wherein the exchange <\/span>sold<\/span><\/a> its platform to USDC issuer, <\/span>Circle<\/span><\/a> for $400 million back in February 2018.<\/span> <\/p>\n The SEC charge alleges that Poloniex, whose name has been changed to Polo Digital Assets under its new owner was involved in the sale of digital securities, while also refusing to properly register the firm as a \u2018National Securities Exchange\u2019.<\/span><\/p>\n \u201c<\/span>The order finds that notwithstanding its operation of the Poloniex trading platform, which was available to U.S. investors, Poloniex did not register as a national securities exchange nor did it operate pursuant to an exemption from registration at any time, and its failure to do so was a violation of Section 5 of the Exchange Act,\u201d the SEC announcement revealed.<\/span><\/p>\n According to SEC officials, Poloniex and its employees operated the trading platform by prioritizing profits over compliance.\u00a0<\/span><\/p>\n \u201cPoloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,\u201d said Kristina Littman, Chief of the SEC Enforcement Division\u2019s Cyber Unit.\u00a0 \u201cPoloniex attempted to circumvent the SEC\u2019s regulatory regime, which applies to any marketplace for bringing together buyers and sellers of securities regardless of the applied technology.\u201d<\/span><\/p>\n The overall settlement thus features an agreement to pay disgorgement of $8,484,313, prejudgment interest of $403,995, and a civil penalty of $1.5 million for a total of $10,388,309. The alleged victims will benefit from a Fair Fund that the order has mandated to be established.<\/span><\/p>\n While the settlement may come off as a dent on the capital base of Circle, the agreement is vital to explore new opportunities devoid of the SEC clampdown. The blockchain startup still has its plans to go public via a Special Purpose Acquisition Company (SPAC) merger deal per an earlier Coinspeaker <\/span>report<\/span><\/a>.\u00a0<\/span><\/p>\n Barring any setback this settlement may stir, Circle recently unveiled its plans to become a National Crypto Bank, a move that will reach the outfit to go beyond state borders in the US.\u00a0<\/span><\/p>\n SEC: Poloniex Prioritized Profit over Compliance<\/b><\/h2>\n
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