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The rapid action of the SEC against the founder of EtherDelta does not seem to have had an immediate impact on the cryptic world. While the non-fiat community has awakened to regulatory rap, cryptographic prices have remained unchanged. With the sole exception of some voices raised by the association of Korean lawyers on Thursday for the legalization of encryption activities and to encourage mass adoption, there has not been much activism on the part of the government. industry or user community to protest the fine.
However, SEC reinforcement the moves have a handful of lessons for the decentralized exchange community (DEX) in particular.
Lessons learned from EtherDelta-SEC Comparison – DEX should follow the same rules
EtherDelta, the exchange of cryptographic tokens reached an agreement with the Securities and Exchange Commission (SEC) of the United States Regulatory Trade Organization, following allegations of trading without the necessary approvals. Zachary Coburn, the founder of the unregistered exchange, did not challenge the SEC exam and instead chose to pay penalties amounting to $ 388,000, disgorgement and interest as part of the agreement.
Andrew Hinkes, professor of the School of Law at the University of New York in his expert commentary on the affair, states that EtherDelta acted as an exchange without the necessary legal approvals from the Council and the laws and the implications on the securities and therefore the action and application by the SEC were only a question of time.
So the agreement came between EtherDelta and the SEC creates a precedent for new things happening in relation to the Decentralized Stock Exchanges (DEX).
DEX and SEC
The surprising part of the deal is that Coburn no longer works with EtherDelta, having left the organization in 2017. However, since SEC was penalizing the organization and its executive members for the 12 July period 2016 and December 17, 2017, Coburn is part of the agreement.
By penalizing the exchange, SEC established the precedent that decentralized networks can not be irresponsible or behave differently from the centralization of server networks. Secondly, even if the company has ceased to operate or if the owners have changed, SEC will apply the securities laws.
The penalty imposed is only a matter of routine and has not had other sanctions in terms of participation in the markets. The experts believe that by cooperating with the regulatory body, Coburn was able to win his favor, otherwise it could have led to suspension or higher fines to participate in capital markets.
The third lesson is that the SEC wants executives behind the actions of an organization to establish guidelines for such management leaders to work within the regulatory dimensions and require no exceptions.
The ICOs have led to the aggressiveness of the SEC
2017 saw the proliferation of ICOs and tokens, especially in the US capital markets. In addition, a plethora of decentralized exchanges has also begun to create a snap using, more commonly, the resources that ran on the Ethereum network. These exchanges engaged in the exchange of resources and therefore did not see the need to operate with a licensing system. In addition, they believed that decentralized agencies did themselves out of the centralized system of server systems regulated by the SEC.
So, another lesson learned here is that the Ethereum – ERC20 platform, if used, can not be considered exempt from exchanges of SEC obligations and compliance. Intelligent contract operations are also violating the exchange of laws, says cyber-law expert Hinkes. However, if Coburn and his group were on alert and kept out "certain tokens", their ERC20 operations would not be a problem, Hinkes says.
Legal labyrinth – the biggest Aftermath
Hinkes suggests that the SEC agreement between Coburns now opens the question of the operations of organizations like EtherDelta. The issue of sales and purchases of unrecorded securities is now indefinite in the United States, while foreign regulatory authorities welcome the ICO and the use of the token. The legal labyrinth remains the largest post after the legal agreement with Coburn.
