The US Securities and Exchange Commission (SEC) announced that it has levied charges against decentralised exchange EtherDelta founder Zachary Coburn of running an unregistered ‘security exchange’.
The founder of EtherDelta has been charged of providing a trading platform for ERC20 tokens many of which are deemed to be security tokens. Any exchange has to register with SEC if they want to trade securities or operate pursuant to an exemption.
EtherDelta for facilitated trading ofnsuch ERC20 tokensfor more than 18 months. Coburn without much resistance admitted to the facts of the report and agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty.
Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, said:
“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. We are witnessing a time of significant innovation in the securities markets with the use and application of distributed ledger technology. But to protect investors, this innovation necessitates the SEC’s thoughtful oversight of digital markets and enforcement of existing laws.”
This action is the first by SEC which indicates that they may be going after other decentralised and centralized exchanges as well. More FUD coming soon?