Crypto Exchange Poloniex Settles With SEC for $10,000,000

Crypto exchange Poloniex has settled with the U.S. Securities and Exchange Commission (SEC) for operating an unregistered digital asset exchange.

According to a statement by the SEC, some of Poloniex’s available investment products counted as securities. The SEC adds Poloniex, which was available to US investors, also failed to register as a national securities exchange or seek exemption from registration while operating.

Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, says that Poloniex skirted SEC regulations in the name of making a profit.

“Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange… 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.”

SEC Commissioner Hester Peirce released a statement slamming the regulatory body’s decision, noting the difficulties Poloniex would’ve faced if it had attempted to comply with the rules.

“Sure, Poloniex could have tried to register as a securities exchange or, more likely, as a broker-dealer to operate an alternative trading system (ATS), a type of regulated trading venue that might be better able to accommodate non-traditional securities. Had it done so, it likely would have waited… and waited… and waited some more.”

The SEC Commissioner also says she can see why some in the crypto space may be unprepared for sudden regulatory enforcement.

“Given how slow we have been in determining how regulated entities can interact with crypto, market participants may understandably be surprised to see us come onto the scene now with our enforcement guns blazing and argue that Poloniex was not registered or operating under an exemption as it should have been.”

Poloniex agreed to pay a total of $10,388,309 without admitting or denying the SEC’s allegations.

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Source: https://dailyhodl.com/2021/08/11/crypto-exchange-poloniex-settles-with-sec-for-10000000/