The U.S. Securities and Exchange Commission ( SEC) has charged
Zachary Coburn, the founder of crypto token trading platform
EtherDelta, with operating an unregistered securities exchange, a press
release by the SEC reveals Thursday, Nov. 8.
EtherDelta, which served as a secondary marketplace for trading ERC20
tokens, allows its users to buy and sell digital assets by means of an
order book and smart contracts based on the Ethereum blockchain .
According to the SEC, over an 18-month operating period, EtherDelta's
users placed more than 3.6 million orders for tokens, including ones
that are considered securities by U.S. federal laws.
The regulator notes that most of the orders were executed after the
DAO report that SEC had released in June 2017. Under the current law,
EtherDelta was obliged to register in U.S. or to apply for an
exemption; however, the SEC notes that the platform failed to do so.
According to the regulator, EtherDelta founder Coburn neither
admitted nor denied the findings, but he consented to cooperate and
to pay the state $300,000 in unlawful profits. Moreover, he agreed to
pay $13,000 in prejudgment interest and a $75,000 penalty. The SEC
also states that it would have imposed a greater fine if Coburn had
failed to cooperate with the investigators.
As Cointelegraph previously reported, the SEC suspended securities
trading in October of Nevada-based firm American Retail Group, Inc.
for making false claims that its cryptocurrency trading activities were
approved by the regulator.
In early November, the SEC reported that it is currently taking action
against “dozens” of fraudulent Initial Coin Offerings ( ICOs ). The
annual enforcement report for the 2018 fiscal year mentioned several
illicit ICOs, three of which defrauded investors of over a combined
$68 million.
Zachary Coburn, the founder of crypto token trading platform
EtherDelta, with operating an unregistered securities exchange, a press
release by the SEC reveals Thursday, Nov. 8.
EtherDelta, which served as a secondary marketplace for trading ERC20
tokens, allows its users to buy and sell digital assets by means of an
order book and smart contracts based on the Ethereum blockchain .
According to the SEC, over an 18-month operating period, EtherDelta's
users placed more than 3.6 million orders for tokens, including ones
that are considered securities by U.S. federal laws.
The regulator notes that most of the orders were executed after the
DAO report that SEC had released in June 2017. Under the current law,
EtherDelta was obliged to register in U.S. or to apply for an
exemption; however, the SEC notes that the platform failed to do so.
According to the regulator, EtherDelta founder Coburn neither
admitted nor denied the findings, but he consented to cooperate and
to pay the state $300,000 in unlawful profits. Moreover, he agreed to
pay $13,000 in prejudgment interest and a $75,000 penalty. The SEC
also states that it would have imposed a greater fine if Coburn had
failed to cooperate with the investigators.
As Cointelegraph previously reported, the SEC suspended securities
trading in October of Nevada-based firm American Retail Group, Inc.
for making false claims that its cryptocurrency trading activities were
approved by the regulator.
In early November, the SEC reported that it is currently taking action
against “dozens” of fraudulent Initial Coin Offerings ( ICOs ). The
annual enforcement report for the 2018 fiscal year mentioned several
illicit ICOs, three of which defrauded investors of over a combined
$68 million.
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