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SEC: EtherDelta was active an unregistered balance exchange

In what could prove to be a groundbreaking case, the US Balance and Barter Commission has answerable the architect of cryptocurrency trading belvedere EtherDelta, Zachary Coburn, with active an “unregistered civic balance exchange.”

The order claims EtherDelta facilitated more than 3.6 actor orders for ERC20 tokens (a accepted Ethereum-based token protocol), many of which purportedly fall under local federal balance laws. “EtherDelta offered trading of assorted agenda asset balance and failed to annals as an barter or accomplish pursuant to an exemption,” the order reads.

The filing added notes that EtherDelta purportedly brokered most of these affairs after the SEC issued a report warning that cryptocurrency barter platforms are appropriate to annals or accomplish pursuant to an exemption. It appears EtherDelta didn’t get the memo though.

“EtherDelta had both the user interface and basal functionality of an online civic balance barter and was appropriate to annals with the SEC or authorize for an exemption,” said SEC co-director of enforcement, Stephanie Avakian.

The SEC says that Coburn has already consented to the order and agreed to pay over $300,000 in fines and penalties. For the record, the analysis is still ongoing, and Coburn has neither accepted or denied the allegation of SEC’s report.

While regulators are assuredly starting to pay absorption to blockchain and cryptocurrency tech, the legal status of such agenda assets charcoal mostly a grey area. Earlier this year, the SEC appropriate that Ethereum is “too decentralized” to be advised a security. But this ruling implies this might not necessarily be the case for Ethereum-based tokens.

Published November 8, 2018 — 15:51 UTC

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