The U.S. Securities and Exchange Commission (SEC) has fined crypto exchange Poloniex $10 million for operating an "unregistered online digital asset exchange." Poloniex has agreed to pay the fine without admitting or denying the SEC's filings.
Founded in 2014, Poloniex was purchased by Circle in 2018 for $400 million. In late 2019, it was spun out of the company, forming a new firm named Polo Digital Assets. According to The Block's sources, Tron founder Justin Sun was leading the consortium that acquired it.
The SEC's action focuses on the timeframe July 2017 to November 2019, until the point of the sale. The SEC claims the exchange sold digital assets that were securities — although the exchange was not registered to do so.
The statement further claims that the exchange wanted to be "aggressive" in adding new tokens, even ones that might be deemed securities.
“Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,” said Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit. “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.”
In a regulatory filing in July, Circle said it had set aside more than $10 million in anticipation of the SEC's complaint. In March, it had offered to settle the case for $10.4 million.