The SEC in the States brings charges against the founder of EtherDelta…
America’s Securities & Exchange Commission (SEC) has announced that it charged the founder of EtherDelta with operating an unregistered exchange. The token exchange found itself in the crosshairs of the SEC, and the charge was brought against its founder, Zachary Coburn.
As per the official announcement from the SEC, “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”. Those being the words of Stephanie Avakian, who is the co-director of the SEC’s Enforcement Division.
The charges have been settled, with Coburn – who neither denied or admitted them formally – stumping up the best part of $400,00 as a consequence. Coburn’s co-operation is what led to the Commission not pursuing a tougher penalty. And interestingly, there’s been no order to shut EtherDelta down.
This is clearly the beginning for the SEC, though. It notes in its own announcement that “this is the SEC’s first enforcement action based on findings that such a platform operated as an unregistered national securities exchange”, and nobody out there is betting that it’ll be the last. The SEC is also already investigation a large number of initial coin offerings (ICOs), with many behind them quickly opting to settle as a consequence.
EtherDelta hasn’t commented on the SEC’s announcement, and presumably is looking to get its head down and attempt business as usual. But this is clearly a high profile shot across its bows, and the question now is which exchange is going to be next.