Cryptocurrency operator Circle Internet Financial Ltd. said it has set aside more than $10 million to settle a case brought by the U.S. Securities and Exchange Commission against Poloniex LLC, its discontinued crypto exchange business, according to a regulatory filing.

Boston-based Circle, which announced earlier this month that it will go public in a $4.5 billion special-purpose acquisition company merger, sold Poloniex in 2019 after acquiring it the previous year, according to a regulatory filing to the SEC earlier this month. Circle recorded a realized loss of $156.8 million on the sale and said the disposal was to “divest from businesses related to speculative cryptocurrency trading” and to “better align” its business with the products it offers.

According to the filing, the SEC filed a complaint in December 2017 against Poloniex related to “the trading of cryptocurrencies that may be characterized as securities.” In March, Poloniex offered to settle the case for $10.4 million.

In the filing, Circle also disclosed it is being investigated by the U.S. Treasury Department’s Office of Foreign Assets Control, which enforces U.S. sanctions. Circle said that in 2019 it received administrative subpoenas from OFAC and an Iranian government agency, looking into possible violations related to Poloniex registered exchange accounts for people in embargoed jurisdictions and for processed transactions that may have violated sanctions.

Circle has determined that, to settle these matters, it would likely pay between $1.1 million to $2.8 million, and has set aside at least $1.1 million to do so, it said in the filing.

A spokesman for Circle didn’t provide a comment. Representatives for the SEC didn’t immediately respond to a request for comment. A spokeswoman for OFAC declined to comment.

Amid the increased oversight of digital currency, Circle in May hired Mandeep Walia as its new chief compliance officer. Mr. Walia most recently served as compliance chief and head of enterprise risk management for Novi, a digital wallet for the Facebook -backed Diem digital currency project.

Write to Mengqi Sun at mengqi.sun@wsj.com