SEC charges EtherDelta founder with running "unregistered exchange"

posted 7 months ago
Marking the first time in history, the US SEC has charged (the founder of) a crypto exchange, EtherDelta, with operating an unregistered exchange. As a DEX, the crypto trading platform allowed users to trustlessly trade Ethereum-based tokens without registering accounts or entrusting their funds to an exchange-controlled wallet. Trading was managed by smart contracts.

According to the SEC, the EtherDelta platform illegally allowed users to trade tokens that the SEC considers to be securities under federal law, making it an unregistered securities exchange. “EtherDelta... was required to register with the SEC or qualify for an exemption” said Stephanie Avakian, co-director of the SEC’s Enforcement Division. Zachary Coburn, EtherDelta’s founder, consented to the order and agreed to pay $300,000 in disgorgement, along with $13,000 in prejudgment interest and a $75,000 penalty, though he has not formally admitted or denied the SEC’s findings.
Tags: blockchain, news