The SEC strikes again; Founder of the Ethereum-based cryptocurrency exchange reviewed by the commission


The United States Securities and Exchange Commission [SEC] has constantly warned investors about the risks associated with the cryptocurrency space. Even if the commission failed to establish an adequate regulatory framework for the booming market, they have always acted against ICOs and fraudulent projects, which mislead investors.

The recent crackdown by the commission ignited the space as this would have been one of the first cases in which the founder of an exchange platform based on the Ethereum platform is carefully examined. The exchange in the spotlight is EtherDelta, a secondary market for ERC20 tokens. The founder was examined by the SEC because he failed to register the exchange with the commission or to operate in accordance with an exemption. The exchange was requested to take advantage of the commission's permission as they were trading tokens that are classified as "securities".

This has been intact since the SEC published its report on the DAO known as the Decentralized Autonomous Organization in July 2017. The DAO was the subject of a hack in 2016, which led to the splitting of the original Ethereum blockchain, creating Ethereum [ETH] and Ethereum Classic [ETC].

The report stated that security token issuers are required to register with the commission unless a valid exemption applies. It also strengthened the fact that all exchanges were required to register as a national stock exchange, unless a valid derogation was applied.

Zachary Coburn, the founder of EtherDelta, has agreed to pay the commission the money earned with the offer of commercial services for tokens, ie $ 300,000. This will include $ 13,000 in injury interest and $ 75,000 as a penalty.

Stephanie Avakian, co-director of the SEC Enforcement Division, said:

"EtherDelta had both the user interface and the basic functionality of an online national stock exchange and was required to register with the SEC or qualify for an exemption."

Steven Peikin, co-director of the SEC Enforcement Division, said:

"We are witnessing a moment of significant innovation in the securities markets with the use and application of distributed ledger technology, but to protect investors, this innovation requires the careful supervision of the SEC of digital markets and the 39; application of existing laws. "

In addition, the head of the SEC cyber-unit, Rober Cohen, believes that the people behind the "code" will always be responsible. In an interview with the Forbes, he said:

"The focus is not on the label you put on something or the technology you are using." The focus is on the function and what the platform is doing, whether it is decentralized or not, whether it's an intelligent contract or not, what matters is that it's an exchange. "

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Priya is a full-time member of the AMBCrypto reporting team. He is a finance specialist with a one-year writing experience. You had no value in Bitcoin or other currencies.

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