(HedgeCo.Net) The Securities and Exchange Commission today announced that Poloniex LLC has agreed to pay more than $10 million to settle charges for operating an unregistered online digital asset exchange in connection with its operation of a trading platform that facilitated buying and selling of digital asset securities.<\/p>\n\n\n\n
The SEC\u2019s order finds that from July 2017 through November 2019, when Poloniex sold its platform, Poloniex operated a web-based trading platform that facilitated buying and selling digital assets, including digital assets that were investment contracts and therefore securities.\u00a0 According to the SEC\u2019s order, the Poloniex trading platform met the criteria of an \u201cexchange\u201d as defined by the securities laws because the trading platform provided the non-discretionary means for trade orders to interact and execute through the combined use of the Poloniex website, an order book, and the Poloniex trading engine.\u00a0 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. \u00a0<\/p>\n\n\n\n
The SEC\u2019s order further finds that in or around August 2017, Poloniex employees stated internally that they wanted Poloniex to be \u201caggressive\u201d in making available for trading new digital assets on the Poloniex trading platform, including digital assets that might be considered securities under the Howey test, in an effort to increase market share. Further, according to the SEC\u2019s order, in or around July 2018, Poloniex determined that it would continue to provide users of the Poloniex trading platform the ability to trade digital assets that it characterized as \u201cmedium risk\u201d of being considered securities in light of the business rewards that would provide to Poloniex.<\/p>\n\n\n\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. \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<\/p>\n\n\n\n
Without admitting or denying the SEC\u2019s findings, Poloniex agreed to the entry of a cease-and-desist order and agreed 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 order establishes a Fair Fund for the benefit of victims.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today announced that Poloniex LLC has agreed to pay more than $10 million to settle charges for operating an unregistered online digital asset exchange in connection with its operation of a trading platform that […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-79027","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/79027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=79027"}],"version-history":[{"count":4,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/79027\/revisions"}],"predecessor-version":[{"id":79031,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/79027\/revisions\/79031"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=79027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=79027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=79027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}