Poloniex Fined Over $10 Million by SEC for Operating Unregistered Platform

​The Securities and Exchange Commission (SEC) announced on Monday that it has charged the crypto asset exchange Poloniex LLC (Poloniex) to pay a penalty of $10,388,309, for it operated an unregistered online digital asset exchange.

From July 2017 through November 2019, Poloniex operated a web-based trading platform that facilitated buying and selling digital assets. Whereas, the regulator found that 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 Securities Exchange Act.  

Further, the SEC found that in or around August 2017, the exchange’s employees wanted Poloniex to be “aggressive” in making available for trading new digital assets on the Poloniex trading platform, in an effort to increase market share. Then in or around July 2018, Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange.

Without admitting or denying the SEC’s 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.