Crypto Exchange Just Agreed To Pay $ 10 Million To Settle SEC Investigation Claiming It Did Not Register | Currency News | Financial and business news

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Jonathan Ernst / Reuters

The Securities and Exchange Commission on Monday announced a $ 10 million settlement with the crypto exchange Poloniex as the agency ramps up its crypto enforcement efforts.

The SEC alleged that Poloniex, a mid-sized exchange founded in 2014, had not registered as a stock exchange with federal regulators. The agency also said that from 2017 to 2019, Poloniex allowed trading in digital assets that were unregistered securities.

Thus, Poloniex fell under the legal classification of a stock exchange and broke the law by not registering, the SEC said in a legal order. Poloniex neither admitted nor denied the wrongdoing, but accepted the settlement.

“Poloniex has chosen to increase its profits rather than comply with federal securities laws by including digital asset securities on its unregistered exchange,” said Kristina Littman, head of the cyber enforcement division of the SEC, in a statement.

Commissioner Hester Peirce, who has often publicly criticized SEC rulings, argued that the agency had imposed an unworkable standard on Poloniex.

“Of course, Poloniex could have tried listing as a stock exchange or, more likely, as a broker,” Peirce wrote in a well-worded dissent. “If he had, he probably would have waited… and waited… and waited again.”

In recent weeks, the SEC has ramped up efforts to control the crypto space, with President Gary Gensler comparing crypto in its current state to the “Wild West.” Last week, the agency unveiled its first-ever decentralized finance execution move, against a so-called DeFi money market fund.

“If a crypto-trading platform is a stock exchange, many crypto-trading platforms are going to have problems,” Bloomberg commentator Matt Levine wrote in a column on Monday.

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