The US regulator said Poloniex agreed to settle without
admitting or denying the charges.
Launched in 2014, Poloniex was acquired in 2018 by Circle, a
payments and digital currency firm whose backers include Goldman Sachs Group
Inc.
Circle announced last month it plans to go public later this
year through a merger with special-purpose acquisition company Concord
Acquisition Corp in a deal that would value the crypto firm at USD 4.5 billion.
In Monday's order, the SEC said from July 2017 through
November 2019, Poloniex operated a Web-based global trading platform that
"facilitated buying and selling digital assets, including digital assets
that were investment contracts and therefore securities." That trading
platform was available to US investors as well.
The SEC said despite operating its trading platform,
Poloniex did not register as a national securities exchange with regulators.
"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.
The order came amid a commitment from SEC Commissioner Gary
Gensler to better oversee the cryptocurrency sector. Gensler, at a global
conference last week, urged Congress to give the agency more authority to
police cryptocurrency trading, lending and platforms, which he called a "Wild
West" riddled with fraud and investor risk.