Enforcement Release: Poloniex, LLC

Date issued: May. 01 2023

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TURBOFAC Commentary (766 words)

Notes:

1) The Poloniex, LLC case is one of many in a string of enforcement cases targeting internet based cryptocurrency exchangers (though this entity deals in cryptocurrency and other assets). Compare Uphold HQ Inc., Payward, Inc. d/b/a Kraken, Bittrex, Inc., BitPay, Inc and BitGo, Inc. The basis for liability is generally the same throughout, i.e. an internet money-related service provider provides services to persons presumed to be "in" or ordinarily resident in sanctioned areas based on Know Your Customer information and internet protocol address data (here both are cited).

2) FOREIGN COMPANY LIABILITY FOR VIOLATIONS OF U.S. SUBSIDIARIES IN THE ABSENCE OF “CONSPIRACY” OR “CAUSING” ALLEGATIONS

The Poloniex case appears to break no new ground as it relates to diligence expectations or legal bases for liability, but there is one aspect of the case that appears to be wholly novel for...