The Securities and Exchange Commission, US announced on monday that the popular cryptocurrency exchange operated a digital platform that facilitated buying and selling of digital assets securities which was a violation of securities law. And has thus without admitting or denying has agreed to the entry of a cease and desist order and agreed to pay a total of $10,388,309.
According to the Securities Regulator, the company operated a web-based trading platform according to its fundings between July 2017 and November 2019 through which it facilitated buying and selling of digital assets which included digital assets it considered as investment contracts and thus securities.
Poloniex attempted ‘break it to make it’
The SEC order showed that Poloniex operated as an ‘exchange’ based on the definitions by securities laws but it didn’t register as a national securities exchange nor did it operate pursuant to an exemption from registration at any time and that it’s failure to register was a violation of Section 5 of the Exchange Act.
The order from the regulator also revealed that at about August 2017, in order to increase market share, Poloniex employees stated they needed to make available or list other/more crypto assets which falls under the securities category based on the Howey test. In furtherance of its initial plan, Poloniex in July 2018 considering there’s a medium risk in the digital assets being considered securities and compared the business reward accruing from the availability of those assets on the platform.
Profit over Compliance
SEC’s Chief of Enforcement Division’s Cyber Unit, Kristina Littman said “Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,”
She further added that “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.”
The total sum of $10,388,309 is made up of disgorgement of $8,484,313, prejudgement interest of $403,995 and a civil penalty of $1.5 million. SEC noted via its publication that it via the order establishes a Fair Fund for the benefit of victims.
What do you think of this story? Share your comments below
VanEck to Give Clients Access to Crypto by Offering a Solana ETF
Solana based DEX, Orca Closes $18M Series A Round
We don’t expect all businesses to adopt e-Naira –CBN
We chose Bitt Inc for the e-Naira because of Capacity & Experience – CBN
KB24 Launches NFTs Collection in Memory of Kobe Bryant, Proceeds to be Given to Charity
President of Turkey Says the Country is at War with Cryptocurrencies
Monetary Policy has been replaced with tyranny; e-Naira will be a flop – Chiagozie Iwu
El Salvador Adds Fresh 150 Bitcoins as BTC Price Slides
10 Days after Adopting Bitcoin, El Salvador Records 17% Adoption for its Wallet Chivo
Watch the Latest Edition of Inside Blockchain – 29th Nov. 2020
Crypto Roast is LIVE – 27th Nov. 2020
AMA Series with Beam CTO & Tech Lead, Alex Romanov
Keep it Locked on to Cryptotvplus
Inside Blockchain | 16.11.2020
Inside Blockchain: WHY YOU SHOULD BECOME A BLOCKCHAIN DEVELOPER
How Blockchain Technology Can Transform Governance In Africa
E-naira Project Award to BITT Raises Regulatory Questions
The Central Bank of Nigeria’s e-naira Project has generated a number of questions lately. The most recent is the contention...
Ecosystem Growth Fund: The newest ways to market and promote blockchain platforms
Fantom, Harmony, Algorand & OKEx has in less than a month announced a billion dollars fund to boost development on...
TOKEN2049 Returns for In-Person Event this October in London
Highly anticipated conference at the forefront of the digital assets space marks the return of one of the first major...
OKEx Launches Super Affiliate Program
Are you a KOL or content creator in the crypto space? Do you want to boost your earning by introducing...
Influencers Are the Drive behind NFTs Popularization – Karla Obarkpolor
The founder of NFT marketplace Qlipit and Crypto Asset Management Company, Crypto Smart has stated that influencers have played big...