In what could turn out to be a groundbreaking affair, the US Securities and Exchange Commission has accused the founder of the EtherDelta cryptocurrency platform, Zachary Coburn, of having organized a "national securities exchange not registered ".
The order states that EtherDelta facilitated more than 3.6 million orders of ERC20 tokens (a popular Ethereum-based token protocol), many of which are presumed to be governed by the laws on local federal securities. " EtherDelta offered trading in various digital asset classes and could not register as a stock exchange or operate under a waiver," says the company. 39; order.
The filing further notes that EtherDelta allegedly negotiated most of these transactions after the SEC issued a report warning that crypto trading platforms currency are required to register or operate in accordance with an exemption. Apparently, EtherDelta did not receive the memo.
"EtherDelta had both the user interface and the underlying functionality of a national stock exchange online and had to register with the SEC or be eligible for an exemption" said Stephanie Avakian, co-director of SEC enforcement,
The SEC claims that Coburn has already accepted the order and agreed to pay more than $ 300,000 in fines and penalties. For the record, the investigation is still ongoing and Coburn neither admitted nor denied the SEC report's findings.
As regulators finally begin to focus on blockchain and cryptocurrency technologies, the legal status of such digital assets remains essentially a gray area. Earlier this year, the SEC suggested that Ethereum was " too decentralized " to be considered a security. But this decision implies that this might not necessarily be the case for Ethereum-based tokens.
Posted on 8 November 2018 – 15:51 UTC