Another crypto platform has been charged with hefty fines of US$ 10 Million by the SEC over the alleged allegations of selling products which according to SEC are “unregistered securities”. While imposing fines, SEC also issued notice against the firm for immediately cease and desist from selling “unregistered securities”. The firm has unconditionally consented to comply with the cease and desist notice and accepted the penalty.
In less than three days’ time, SEC has taken yet another enforcement action against another US-based crypto firm. The action has been taken under the garb of an allegation which suggested that the firm was engaged in the sale of non-authorized crypto products. In particular, SEC has claimed that an American crypto firm Poloniex was in the practice of offering for sale “unregistered securities”. The authority further noticed that from 2017 till the end of 2019, the firm was actively involved in the illegal sales of “unregistered securities”.
As per SEC, Poloniex was obligated under the Securities Law to register its tradable securities before presenting them in the market. However, without obtaining the authorization through SEC’s registration, the firm went on to sell and buy securities. SEC described that under Section 5 of the relevant law ibid, the trade of unregistered securities is illegal. In fact, such an act is contrary to the law and the violator is liable to legal action and imposition of fines.
One of the officials of the SEC also claimed that Poloniex was deliberately avoiding the process of registration. In fact, the firm was circumventing the jurisdiction of SEC, claimed the official. The official further stated that while selling unauthorized products, the firm was earning huge profits. However, the firm gave importance to the earnings and devoid the compliance and the law. This glaringly shows the irresponsible behavior on the part of Poloniex, claimed SEC’s official.
The enforcement action was duly taken by the SEC which included the imposition of a fine to the tune of US$ 10.34 Million. Also, the SEC has issued notice for ceasing and desisting from the sale of unregistered products. When the notice was issued to Poloniex, the firm immediately suspended the sale of alleged “securities”. However, in an unofficial statement, the firm denied that it was involved in the sale of unregistered securities. Instead, it is SEC’s own assumption that the product offered for sale was “securities”. But according to the information and knowledge of the firm the products shouldn’t be treated as such.
However, the firm has unconditionally accepted the notice as well as the fines. The CEO of the firm commented that Poloniex is complying with the SEC’s requirement without admission of guilt or innocence. The decision has been purely taken in good faith and the firm retains the right to contest the action before a court of law, if necessary.
