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Earlier quoted context omitted.
ICOs are mostly illegal unregistered securities so any service that trades those tokens is also illegal.
I'm not talking about ICOs. In fact, EtherDelta was one of the few projects that launched without an ICO, and before the ICO craze.
if it quacks like a duck, looks like a duck, it's probably one in their eyes.
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They were barely able to raise $12mm ( https://www.google.com/amp/s/amp.reddit.com/r/EtherDelta/com... )
That still sounds like a great return if it was just setup by one guy? Even if his legal and running costs were $2M - walking away with $10M would be great
Earlier quoted context omitted.
I'm not talking about ICOs. In fact, EtherDelta was one of the few projects that launched without an ICO, and before the ICO craze.
the SEC doesn't give a shit. if it quacks like a duck, looks like a duck, it's probably one in their eyes.
Earlier quoted context omitted.
ICOs are mostly illegal unregistered securities so any service that trades those tokens is also illegal.
I'm not talking about ICOs. In fact, EtherDelta was one of the few projects that launched without an ICO, and before the ICO craze.
I am no libertarian, but this feels thoroughly unfair on a human level. EtherDelta was a noble pursuit in my book - it was useful, entrepreneurial and did not exploit anybody.
That being said, this is a classic example of the law failing to keep pace with technology. Up until a few years ago it was a given that exchanges required a neutral third party to facilitate transactions and that, in the interest of fairness and full disclosure, those market makers needed to be registered and regulated. The law simply does not contemplate a self-regulated exchange governed by smart contracts and a decentralized ledger.
U.S. regulators also tend to focus on compliance with black-letter law without giving much credence to compliance with the spirit of the law. In my opinion, this all-or-nothing approach stymies innovation because regulators and innovators become adversaries when they could and should be allies.
How is that different than running an etherium miner? Actually, didn't it run on an etherium miner? can you get a fee from a contract someone else mined because you are the author? well I guess so otherwise why would the creator be being fined? ...etherium is weird.
I am no libertarian, but this feels thoroughly unfair on a human level. EtherDelta was a noble pursuit in my book - it was useful, entrepreneurial and did not exploit anybody.
During the boom, I was really glad that ED was around when I wanted to make large buys because it eliminated counter-party risk. With regular exchanges it was common to have withdrawals halted or have deposits not show up for hours with no support, if they showed up t all. Eventually they couldn't handle the volume and it fell apart but when it worked it was a godsend
https://www.ccn.com/cryptocurrency-exchange-etherdelta-hacke...
Earlier quoted context omitted.
I'm not talking about ICOs. In fact, EtherDelta was one of the few projects that launched without an ICO, and before the ICO craze.
EtherDelta allows you to trade illegal securities, therefore EtherDelta is also illegal.
Also, I'm not talking about if it's illegal or not, the point that I can't get over is that the ED guy didn't scam or hurt anyone. It was an honest, transparent, open source project.
The size of the fine strongly indicates (in my totally non-expert opinion) that the SEC was actually deeply grateful to the EtherDelta founder for educating them about how his operation functioned and how this marketplace even worked. I wouldn’t be surprised if he helped write the document we just read.
This is not even a slap on the wrist, this is practically them saying “job well done, sir!”
The point of filing in the first place and ultimately reaching this agreement was clearly a learning experience for the SEC and a practice run for starting to better regulate this new technology.
They learned the ropes with a defendant who didn’t even own the company anymore, and basically hired him to consult for them. The plea lets the SEC put a feather in their hat and try to better establish that they want to regulate even smart-contract based non-custodial trading engines.
Which really kind of sucks because a truly non-custodial smart contract trading engine carries none of the risks that the national exchange regulations were designed to protect against, does it?
Maybe there is still manipulation of the order book that could occur.
And also, which specifically comes up in TFA, the fact that EtherDelta picked which securities were displayed in the book was a key aspect of them being an exchange. If you’re going to, even implicitly, endorse specific tokens, you are going to be subject to these regulations.
It would be great to know specifically how far back you would have to walk from the EtherDelta “line” before the SEC would not pursue enforcement. Is any centralization at all fatal?
I’m going to guess you need a fully decentralize trading book, and users need to explicitly identify the token they want to trade (i.e. by selecting the correct book) before there is no longer an individual person they could target as an exchange.
Basically, I am guessing, you have to get to a point where you aren’t even capable of collecting transaction fees beyond what the miners require to include the transaction in a block.
Overall a very interesting post.