WASHINGTON--The Securities and Exchange Commission brought and settled its first case against a firm in the so-called decentralized-finance or DeFi sector, the latest sign of intensifying regulatory scrutiny for cryptocurrency markets.

The SEC said Friday it had charged two Florida men, Gregory Keough and Derek Acree, and their company, Blockchain Credit Partners, with making materially false and misleading statements in selling more than $30 million of unregistered securities using smart contracts, which are digital consent agreements, and DeFi technology.

Please also see: DeFi Is Helping to Fuel the Crypto Market Boom—and Its Recent Volatility

Messrs. Keough and Acree agreed to a cease-and-desist order, which includes returning $12.85 million in profits and paying penalties of $125,000 each, the agency added. Under the terms of the settlement, they didn’t deny or admit wrongdoing. Efforts to reach the two men by phone and through the Institute for Blockchain Innovation, a think tank they co-founded, weren’t immediately successful.

The settlement was reached days after SEC Chairman Gary Gensler vowed to take the SEC’s authorities “as far as they go” in policing cryptocurrency trading and lending platforms. He singled out DeFi as a focus area, saying he believed the platforms are subject to securities laws.

From the Archives

SEC Commissioner Hester Peirce speaks with Jack Hough on the Streetwise podcast about how the U.S. government can effectively approach regulating Bitcoin and other cryptocurrencies. The views expressed by Commissioner Hester Peirce are her own views, not necessarily those of the SEC or her fellow commissioners. The Wall Street Journal Interactive Edition

Often used by people seeking to borrow against their cryptocurrency holdings, DeFi platforms have received tens of billions of investor dollars over the past 12 months. Assets deposited as collateral on DeFi platforms have swelled to $85 billion from around $3 billion a year ago, according to data provider DeBank.

DeFi frauds cost investors $83.4 million from January to April, according to analytics firm CipherTrace.

According to the SEC’s cease-and-desist order, Messrs. Keough and Acree and their company sold two types of unregistered securities on a platform called DeFi Money Market from February 2020 to February 2021.

The first, dubbed mTokens, claimed to offer 6.25% annual interest by using clients’ cryptocurrency holdings to buy real-world assets such as car loans. The second, called DMG tokens or “governance tokens,” would trade on secondary markets and purported to give investors voting rights on DeFi Money Market’s business and a share of its profits.

One problem with the platform’s business model was that, while the real-world assets it intended to purchase would generate sufficient income to pay interest, they might not cover the appreciation of investors’ principal if prices for volatile cryptocurrencies rose, the SEC said.

Messrs. Keough and Acree didn’t notify investors of the issue, the SEC said. Instead, they concealed how the business was operating and moved money from a separate firm they ran, the Florida Finance Company, to pay investors.

DeFi Money Market announced in February on its website and Twitter account that it had received an investigative subpoena from the SEC on Dec. 15, 2020, and was shutting down. It said it would allow redemption of mTokens indefinitely and that it was setting up “an additional fund of available assets” to allow DMG tokens to be redeemed.

Write to Paul Kiernan at paul.kiernan@wsj.com