Did the SEC just fire a warning shot across the bow of crypto?
In news out late yesterday, the SEC revealed that they had charged the founder and creator of EtherDelta (Zachary Coburn) with operating an unlicensed securities exchange.
The release can be found here:
If you are not familiar, EtherDelta has operated as a quasi decentralized crypto exchange on the Ether network for the last couple years.
This is very interesting for several reasons.
For one, the SEC charged the developer, not the exchange itself as the exchange wasn't really one centralized entity.
This sets an interesting and dangerous precedent for developers developing things on crypto platforms going forward.
They could be held liable if something the build ends up being used to violate securities laws...
Perhaps they will all go anonymous from here on out?!
Secondly, it begs the question as to what exactly the SEC considers a security?
Most had thought we were getting past this opaque regulatory stage and the SEC was going to let some of the older coins slide, while focusing mainly on the newer coins in regards to what is a security and what is not.
However, this latest enforcement action opens things up again to just what exactly the SEC might consider a security.
Which is a major reason why the crypto markets have been selling off ever since yesterday afternoon when this news broke.
(Source: https://coinsutra.com/security-tokens-vs-utility-tokens/)
What will this mean for crypto exchanges going forward?
As far as I know very few have the proper licensing to be trading securities, will the SEC go after them?
Will the SEC be going after ones that are not registered in the US but still have US clients?
Lots of unanswered questions after this latest enforcement action...
This just goes to show why one of the biggest risks to the crypto markets continues to be a lack of clarity on where regulators stand on several important issues.
My hope is that they try to work with ones that may be unknowingly violating laws instead of coming down hard on them.
Hopefully this doesn't interfere with our setup for a possible Santa Claus rally to end the year.
Stay informed my friends.
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Scary 😩👎😩
Yep, hopefully it will not affect SMT development in any way.
SMT development? Is that rumor still kicking around? Should come online in 2024?
Well they have been putting out an update on their SMT development each week:
https://steemit.com/steem/@steemitblog/smt-development-update-4
The testnet is expected to launch around mid-January.
Still a long ways to go, but it may not be as much fairy tale as we originally thought!
I also see this as a sign the US is taking crypto seriously and are ready to fully regulate it.
The question then becomes, how does crypto react?
Regulations means rules, in leaning more towards the negative because the sentiment towards regulations and rules has always been negative in my opinion.
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However, the rules and regulations will also allow bigger money to invest with more confidence.
True it’s offers a sense of security, however then the situation arises where now an investment becomes risky because one investor doesn’t know the sentiments of other traders.
Will they be willing to take the risk and invest because rules and regulations offer security or whether they make it hard for a person to invest and gain returns.
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It will most likely make it safer for big investors to enter. Though the returns will probably be smaller as there will be better price discovery as well.
Will this affect Steem or SMTs..
That is what I would like to know...
Very interesting news, around the same time that China have apparently unbanned Bitcoin and crypto trading.. Watch this space I guess...
Yea it looks like that news was fake news though. Unfortunately.
Crypto is getting to the "Then they fight you" phase.
Haha what do you mean?
And we are in the fight stage? I feel like we are in the laugh at you stage personally. Lot of people laughing at anyone holding crypto at this point...