SEC’s distribution plan for $10.4M Poloniex fair fund not ready yet

The United States Securities and Exchange Commission (SEC) will need additional time to prepare a distribution plan for the $10.38 million in penalties paid by Poloniex.

The Division of Enforcement has stated that additional time is needed to complete the fund administrator solicitation and appointment process, develop the distribution methodology, and draft the proposed plan of distribution.

Accordingly, it was ordered on September 17, 2021, that the Division’s request for an extension of time until April 29, 2022 to submit a Proposed Plan of Distribution is granted.

Let’s recall that, on August 9, 2021, the SEC issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order against Poloniex, LLC.

In the Order, the Commission found that from July 2017 through November 2019, Poloniex operated a digital asset trading platform that meets the definition of an “exchange” under the federal securities laws but did not register as a national securities exchange nor operate pursuant to an exemption from registration at any time, in violation of Section 5 of the Securities Exchange Act of 1934. The Commission ordered the Respondent to pay $8,484,313.99 in disgorgement, $403,995.12 in prejudgment interest, and a $1,500,000 civil monetary penalty to the Commission.

The Commission also created a Fair Fund, so the penalty paid, along with the disgorgement and interest paid, can be distributed to harmed investors.

The Fair Fund consists of the approximately $10,388,309 paid by the Respondent.

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