# SEC bars Prosperity operator Michael Levi Peters over unregistered brokerage

> The SEC settled proceedings against Michael Levi Peters for unregistered brokerage through Prosperity's crypto-funded trading platform.

- URL: https://riadefi.com/regulation/2026-09-30-sec-michael-levi-peters-prosperity-enforcement/
- Posture: Enforcement
- Authorities: U.S. Securities and Exchange Commission
- Event date: 2026-09-30
- Effective: 2026-09-30
- Version: 1, published 2026-10-01 (first published 2026-10-01)
- Advisor-relevant: yes

## What changed

The SEC settled proceedings against Michael Levi Peters for unregistered brokerage through Prosperity's crypto-funded trading platform. The order finds that Peters solicited and effected stock-based CFD transactions constituting security-based swaps. It imposes a cease-and-desist order, an association bar with a right to apply for reentry after two years, and a $65,000 penalty. Peters did not admit the findings except jurisdiction and the limited bankruptcy-discharge provision. The stock-based-swap finding does not establish the securities status of every crypto asset or CFD offered on the platform.

## Who it affects

- Michael Levi Peters
- Firms considering association with Peters
- Advisers evaluating client exposure to crypto-funded CFD platforms

## What is still open

- Whether Peters will seek or receive reentry approval
- The regulatory and custody arrangements of other platforms using comparable service providers

## What it means for an advisor

- Update personnel and promoter screening for Peters
- Review product classification and intermediary registration before facilitating crypto-funded trading
- Verify who controls client crypto margin assets and processes withdrawals

## Sources

1. [In the Matter of Michael Levi Peters](https://www.sec.gov/files/litigation/admin/2026/34-106542.pdf) · U.S. Securities and Exchange Commission · 2026-09-30 · effective 2026-09-30


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.