SEC charges EtherDelta founder with running unregistered securities exchange

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.”

The order claims EtherDelta facilitated more than 3.6 million orders for ERC20 tokens (a popular Ethereum-based token protocol), many of which purportedly fall under local federal securities laws. “EtherDelta offered trading of various digital asset securities and failed to register as an exchange or operate pursuant to an exemption,” the order reads.

The filing further notes that EtherDelta purportedly brokered most of these transactions after the SEC issued a report warning that cryptocurrency exchange platforms are required to register or operate pursuant to an exemption. It appears EtherDelta didn’t get the memo though.

“EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption,” said SEC co-director of enforcement, Stephanie Avakian.

The SEC says that Coburn has already consented to the order and agreed to pay over $300,000 in fines and penalties. For the record, the investigation is still ongoing, and Coburn has neither admitted or denied the findings of SEC’s report.

While regulators are finally starting to pay attention to blockchain and cryptocurrency tech, the legal status of such digital assets remains mostly a grey area. Earlier this year, the SEC suggested that Ethereum is “too decentralized” to be considered a security. But this ruling implies this might not necessarily be the case for Ethereum-based tokens.

Published November 8, 2018 — 15:51 UTC

About the author

E-Crypto News was developed to assist all cryptocurrency investors in developing profitable cryptocurrency portfolios through the provision of timely and much-needed information. Investments in cryptocurrency require a level of detail, sensitivity, and accuracy that isn’t required in any other market and as such, we’ve developed our databases to help fill in information gaps.

Related Posts

E-Crypto News Executive Interviews



Automated trading with HaasBot Crypto Trading Bots

Crypto Scams

Millions in Cryptocurrency Stolen by Scammers in the Last Month According to Tenable Research
November 24, 2021
Behind The Scenes: How this Crypto Community Responded to + $50m Hack
October 18, 2021
Crypto Scams
Crypto Scams Still Persistent In 2021, SEC Warns About Red Flags To Watch
September 9, 2021
Poly Network
Here’s How Hackers Stole Over $600 million in the Poly Network Attack
August 12, 2021
The World’s Most Infamous Crypto Hacks and Scams
July 31, 2021

Blockchain/Cryptocurrency Questions and Answers

Crypto casinos
How Does Bitcoin Casino Work + 2021 Beginner’s Guide
November 8, 2021
Cryptocurrency
How to Buy and Sell Cryptocurrency
November 8, 2021
What Are Bitcoin Futures And How Will They Work In 2022?
November 4, 2021
Ethereum
The Unconventional Guide to Ethereum
October 28, 2021
ICo Presale
The Science Behind ICO Presales…
October 14, 2021


CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin51,256 0.55 % 6.60 % 11.40 %
Ethereum4,409.6 1.33 % 9.27 % 0.79 %
Binance Coin587.09 0.05 % 6.81 % 5.89 %
Tether0.9986 0.03 % 0.08 % 0.23 %
Solana203.20 2.09 % 10.24 % 0.56 %
Cardano1.470 2.35 % 11.75 % 8.23 %
USD Coin1.000 0.14 % 0.20 % 0.17 %
XRP0.8374 0.84 % 7.95 % 15.53 %
Polkadot30.87 2.19 % 17.29 % 10.73 %
Terra68.86 0.75 % 9.18 % 33.50 %

bitcoin
Bitcoin (BTC) $ 50,972.00
ethereum
Ethereum (ETH) $ 4,360.21
binance-coin
Binance Coin (BNB) $ 585.85
tether
Tether (USDT) $ 0.998636
solana
Solana (SOL) $ 200.26
cardano
Cardano (ADA) $ 1.44
usd-coin
USD Coin (USDC) $ 0.998668
xrp
XRP (XRP) $ 0.830677
polkadot
Polkadot (DOT) $ 28.56
terra-luna
Terra (LUNA) $ 69.09