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ARTICLE · 14 NOVEMBER 2018

SEC Issues Cease & Desist Order Against Operator Of EtherDelta

Pryor Cashman LLP
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As previously covered by the FinTech Monitor, in March 2018 the SEC's Enforcement and Trading and Markets Divisions jointly issued a statement warning investors ...

United StatesCorporate/Commercial Law
E. Scott Schirick
E. Scott Schirick
Matthew Barkan
Matthew Barkan
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As previously covered by the FinTech Monitor, in March 2018 the SEC's Enforcement and Trading and Markets Divisions jointly issued a statement warning investors about the use of online trading platforms for the exchange of tokens and cryptocurrencies. Signaling its heightened interest in enforcing the securities laws with respect to online trading platforms, the SEC's March 2018 statement even encouraged those "employing new technologies to develop trading platforms to consult with legal counsel to aid in their analysis of federal securities law issues..." 

The SEC's warning has been borne out.

On November 8, 2018, the SEC issued a Cease & Desist Order individually against Zachary Coburn, who launched and operated EtherDelta, an online platform focusing on trades in ERC20 compatible tokens. The SEC contended that because the ERC20 tokens traded on the platform "included securities as defined by Section 3(a)(10) of the Exchange Act," EtherDelta was an "Exchange"

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