The American Commission on securities and exchange Commission (SEC) brought charges against the founder of the platform for trading cryptocurrency tokens EtherDelta Zachary Coburn in the operational management of unregistered exchange for the sale of securities.
In a statement, the regulator says that EtherDelta performs the function of a secondary market for the trading of tokens of the standard ERC-20, which the SEC sees as “digital”securities.
SEC Charges Founder EtherDelta With Operating an Unregistered Exchange https://t.co/KYRBmn2UHw
— SEC_News (@SEC_News) 8 November 2018
In particular, the platform gave buyers and sellers the opportunity to make transactions with the help of the order book, site to display applications and smart contract, based on Ethereum.
“Smart EtherDelta contract was written in such a way to perform validation related applications message, to confirm the conditions of applications to perform matching of the application and to manage the update of the distributed registry, providing it with the concluded transactions”, — stated in the message SEC.
The regulator points out that EtherDelta was not registered with the SEC and has not filed a statement to fall under the exception in the context of the Federal securities laws.
“EtherDelta was user interface and basic functionality national online exchange securities. For this reason, it had to be registered with the SEC or fall under exceptions to the rules”, — said the co-Director of the SEC enforcement Division Stephanie Avakian.
As noted, Coburn is not recognized, but did not reject his guilt. Nevertheless, he agreed to return to the state illegally obtained profit in the amount of $300 000, and to pay $13 000 as interest for the period prior to judgment and $75,000 fine. The Department also noted that Coburn cooperated with the investigation, which led to a decrease in the amount of the fine.
This case is also notable because was the first case of this kind, which concerns the exchange on which never conducted transactions with Fiat currencies. Zachary Coburn himself has ceased to conduct operational management of the market back in 2016.
We will remind, last week the exchange IDEX acknowledged that there is a decentralized, saying that users have to go through a mandatory verification.