On November 8, 2018, the U.S. Securities and Exchange Commission
(the "SEC") settled its first case
against an unregistered cryptocurrency exchange. Zachary Coburn,
founder of EtherDelta, agreed to pay $313,000 in disgorgement and
interest, along with a civil fine of $75,000, in order to settle
SEC allegations that EtherDelta was acting as an unregistered
securities exchange.
In its Order Instituting Cease-and-Desist Proceedings Pursuant
to Section 21C of the Securities Exchange Act of 1934, Making
Findings, and Imposing a Cease-and-Desist Order, the SEC found that
EtherDelta was effecting and reporting transactions in securities.
EtherDelta, an online platform running on the Ethereum blockchain,
matched buyers and sellers of Ether and "ERC20" digital
assets. EtherDelta also provided access to the EtherDelta order
book, and displayed bids and offers by symbol, price, and size. The
SEC considers ERC20 tokens to be securities because the purchasers
of ERC20 tokens
