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After falling under severe clampdown by the SEC, the Boston-based crypto exchange Poloniex is reported to resolve the case by paying over $10 Million as settlement charges to the regulator.
Image Source: US SEC
According to a press release made by the United States SEC on August 9, the crypto exchange Poloniex has breached investor protection laws by not registering itself as a ‘securities broker’ with the federal regulator. Allegedly, the exchange operated illegally and offered the investors to trade digital assets, deemed as security for two consecutive years, from 2017 to 2019.
The SEC’s indictment also proclaims that Poloniex employees wanted the exchange to function ‘aggressively’ by offering more digital assets to the traders so that the market share of the broker heightens significantly around the space. However, all these charges and the ensuing settlement was made with the exchange neither agreeing to the SEC’s charges nor denying it.
Poloniex Brought Down To Ashes By the United States SEC
While August 9 marked another successful day for the SEC, the Boston-based crypto broker Poloniex was brought down to ashes by the US federal authorities. SEC accused Poloniex of breaching Section 5 of the Investor Protection Act and not registering itself as a ‘securities broker.’ Reportedly, the exchange has conducted unlawful trading operations for two consecutive years from July 2017 to November 2019, without getting noticed by any policing authorities. However, it is tracked down by the SEC and is facing a severe clampdown now.
Poloniex Cuts Down A Settlement Deal With SEC
At present Poloniex has not admitted its wrongdoings but it has certainly figured out a middle ground with the SEC to settle the lawsuit. The exchange has agreed to pay $10 Million as a settlement fee to cool down the dispute and commence its operations once again. SEC believes,‘$10 million is a fair fund for the benefit of Victims.’
Furthermore, the exchange employees are also speculated to fall under investigatory charges. Allegedly, in an internal statement made around 2018, the employees wanted the exchange to ace in the space, function ‘aggressively’ and offer more new digital assets for trading to investors, deemed as high risk securities by the SEC. Kristina Littman, Commission’s Enforcement Chief asserted that Poloniex opted for profits over compliance by including digital asset securities on its unregistered exchange.
More about Poloniex
Back in February 2018, USDC stable coin issuer, Circle, occupied Poloniex for $400 million. However, the venture couldn’t sustain long and Poloniex cut ties with Circle in October 2019 to formulate a new crypto exchange, ‘Polo Digital Assets.’
The post Breaking: SEC Hits Poloniex With $10M Fine For Violating Securities Laws appeared first on Coingape.
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