SEC charges decentralized exchange, EtherDelta, for operating unregulated cryptocurrency exchange
Ishan Garg Posted On November 8, 2018 
The Security and Exchange Commission (SEC) of the US charged the decentralized exchange (DEX), EtherDelta, for operating an exchange without registering it.
As a DEX, EtherDelta allows users to trade Ethereum based tokens anonymously and without the funds being stored by the exchange. But according to the SEC, EtherDelta got the users to exchange tokens which it deems as security, thus breaking the law.
JUST IN: SEC charges EtherDelta founder with operating an unregistered exchange — its the agency's "first enforcement action based on findings that such a platform operated as an unregistered national securities exchange." Story to come
— CoinDesk (@coindesk) November 8, 2018
EtherDelta’s founder Zachary Coborn has agreed to pay a fine of $300,000 in disgorgement plus $13K in prejudgment interest and a $75K penalty.
4/Without admitting or denying the SEC's findings, EtherDelta founder Zachary Coburn agreed to pay $300K in disgorgement plus $13K in prejudgment interest and a $75K penalty.
— CoinDesk (@coindesk) November 8, 2018
According to a statement received by CCN,
“We are witnessing a time of significant innovation in the securities markets with the use and application of distributed ledger technology,” added Steven Peikin, co-director of the SEC’s Enforcement Division. “But to protect investors, this innovation necessitates the SEC’s thoughtful oversight of digital markets and enforcement of existing laws.”
Blockmanity’s Take
One of the fundamental challenges a DEX has to overcome is a political barrier imposed through anonymous trading. Centralized Exchanges have overcome the political barrier by cooperating with the government, but due to the decentralized nature of DEX it becomes much harder. EtherDelta penalty is the first one of many other fines to come.
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