SEC Cyber Chief Puts A New Type Of Cryptocurrency Exchange On Notice
The desire to 'slip and slide' around standards and regulations with new 'currencies' is fraught with weaknesses and will require new thinking to ensure there is no 'wild west' approach with peoples' money!
As similar decentralized exchanges are being launched with increasing ease and frequency, the warning shows how serious the SEC is about taming the cryptocurrency Wild West and the semantics used to bolster it.
“The focus is not on the label you put on something or the technology you’re using,” says Cohen. “The focus is on the function, and what the platform is doing. Whether it’s decentralized or not, whether it’s on a smart contract or not, what matters is it’s an exchange.”
While traditional, centralized exchanges like Coinbase, or even Nasdaq, are run by individuals, this new breed of decentralized exchanges runs on self-executing code. Instead of serving as a middleman connecting buyers and sellers, these decentralized exchanges connect people directly using the code, also known as a smart contract.
But according to Cohen, the individuals behind that code remain responsible. It's notable that the SEC's charges yesterday were not against the exchange but the individual, Zachary Coburn, founder of the unlicensed decentralized EtherDelta token exchange.
The exchange, which is still operational in spite of the fact that, according to the SEC, Coburn is being cooperative, has already helped users execute 3.6 million orders and took its most recent order at 3:07 pm ET on Friday, November 9.
Original article found here: https://www.forbes.com/sites/michaeldelcastillo/2018/11/09/new-sec-cyber-chief-puts-cryptocurrency-exchanges-on-notice/?utm_source=newsletter&utm_medium=email&utm_campaign=daily-dozen#252712c32fb8
by Michael del Castillo
Cryptocurrency exchanges, be warned. There’s no out-innovating the regulatory reach of the U.S. Securities and Exchange Commission.
Cryptocurrency exchanges, be warned. There’s no out-innovating the regulatory reach of the U.S. Securities and Exchange Commission.
Clarifying an announcement yesterday that the SEC is in the middle of its first-ever case against a cryptocurrency exchange running on the ethereum blockchain, Robert Cohen, the chief of the SEC’s newly created cyber unit, exclusively told Forbes that using any blockchain to create an exchange without central operations doesn’t remove the original creator's responsibility.
“The focus is not on the label you put on something or the technology you’re using,” says Cohen. “The focus is on the function, and what the platform is doing. Whether it’s decentralized or not, whether it’s on a smart contract or not, what matters is it’s an exchange.”
While traditional, centralized exchanges like Coinbase, or even Nasdaq, are run by individuals, this new breed of decentralized exchanges runs on self-executing code. Instead of serving as a middleman connecting buyers and sellers, these decentralized exchanges connect people directly using the code, also known as a smart contract.
But according to Cohen, the individuals behind that code remain responsible. It's notable that the SEC's charges yesterday were not against the exchange but the individual, Zachary Coburn, founder of the unlicensed decentralized EtherDelta token exchange.
The exchange, which is still operational in spite of the fact that, according to the SEC, Coburn is being cooperative, has already helped users execute 3.6 million orders and took its most recent order at 3:07 pm ET on Friday, November 9.
Original article found here: https://www.forbes.com/sites/michaeldelcastillo/2018/11/09/new-sec-cyber-chief-puts-cryptocurrency-exchanges-on-notice/?utm_source=newsletter&utm_medium=email&utm_campaign=daily-dozen#252712c32fb8
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