"This is a significant action by the SEC because it is the first enforcement action again an illegally operating exchange", Dina Ellis Rochkind of the NY law firm Paul Hastings LLP said in an email.
The US Securities and Exchange Commission's (SEC) move against the decentralized crypto exchange EtherDelta is a significant action by the SEC since it is its first enforcement action ever against an exchange deemed to be operating illegally.
In what could prove to be a groundbreaking case, the US Securities and Exchange Commission has charged the founder of cryptocurrency trading platform EtherDelta, Zachary Coburn, with running an "unregistered national securities exchange". According to statistics from the SEC, over an 18-month period, there were over 3.6 million orders placed on EtherDelta. Those platforms where these tokens were traded are subject to the SEC's requirement that the exchange should be registered or operate "pursuant to an exemption".
The Security and Exchange Commission (SEC) of the USA charged the decentralized exchange (DEX), EtherDelta, for operating an exchange without registering it. "This will likely be the first of many enforcement actions and think the following sentence is interesting", Rochkind said.
As a DEX, EtherDelta allows users to trade Ethereum based tokens anonymously and without the funds being stored by the exchange.
Coburn, who has neither admitted or denied the findings of the agency, had cooperated with the agency by agreeing to pay over $300,000 in disgorgement, as well as $13,000 in prejudgment interest and an additional $75,000 fine. The SEC noted in the report that certain digital assets, including DAO tokens, are considered as securities. Despite EtherDelta being a strictly decentralized ERC20 exchange, the SEC seems to still enforce regulation over such platforms. In the future, it is clear the SEC will continue to levy enforcement actions against ICOs and exchanges that operate without complying with USA regulations. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Please do your own due diligence before taking any action related to content within this article.
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