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. SEC Division of Enforcement co-director Stephanie Avakian said in a statement that "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." The SEC noted that Coburn cooperated with the regulator, resulting in a lower penalty than may have otherwise been administered. SEC image via Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a . Though he did not admit to or deny the charges, he paid $300,000 in disgorgement, $13,000 in prejudgement interest and a $75,000 penalty.
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.
The regulator announced Thursday that EtherDelta, which acts as a secondary market for trading ERC-20 tokens, had been providing a marketplace for buyers and sellers to trade the ethereum tokens using an order book, an order display website and a smart contract built on ethereum, according to a press release.
"EtherDelta's smart contract was coded to validate the order messages, confirm the terms and conditions of orders, execute paired orders, and direct the distributed ledger to be updated to reflect a trade," it said.
EtherDelta users conducted more than 3.6 million trades over an 18-month period "for ERC-20 tokens, including tokens that are securities under the federal securities law," according to the release, which went on to add:
"Almost all of the orders...
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