Cryptocurrency prices were little changed on Friday even after the U.S. Securities and Exchange Commission (SEC) charged Zachary Coburn, the founder of crypto token trading platform EtherDelta, with running an unregistered securities exchange.
Bitcoin slipped 0.5% to $6,488.2 by 1:30 AM ET (06:30 GMT) on the Bitifinex exchange.
The SEC said on Thursday that EtherDelta allowed users to trade Ethereum-based tokens without registering accounts.
Trading was managed by a “smart contract,” the regulator said.
"EtherDelta's smart contract was coded to validate the order messages, confirm the terms and conditions of orders, execute paired orders, and direct the distributed ledger to be updated to reflect a trade.”
"Almost all of the orders placed through EtherDelta's platform were traded after the Commission issued its 2017 DAO Report, which concluded that certain digital assets, such as DAO tokens, were securities and that platforms that offered trading of these digital asset securities would be subject to the SEC's requirement that exchanges register or operate pursuant to an exemption,” said SEC.
Zachary Coburn agreed to pay $300,000 in disgorgement, along with $13,000 in prejudgment interest and a $75,000 penalty. He did not admit or deny the SEC’s findings.
Citing a person familiar with the SEC's thinking, CoinDesk said this might be the first of many legal actions to come against crypto token exchanges.
CoinDesk added that this is because such trading platforms have become an important priority for the agency's enforcement division.
In other news, South Korea’s lawyers urged the government to pass a legal framework for digital coins.
The Korean Bar Association lobbied the government on Thursday, saying the legislation was needed to promote the industry and protect consumers.
“We urge the government to break away from negative perceptions and hesitation, and draw up bills to help develop the blockchain industry and prevent side effects involving cryptocurrencies,” Bar Association President Kim Hyun said.
The report came one day after Deputy Prime Minister of Thailand Wissanu Krea-ngam said he wanted more regulations on virtual coins. Krea-ngam thinks new measures are necessary both domestically and internationally to protect consumer security.