Bitcoin Forum

"Washington D.C., Nov. 8, 2018 —
The Securities and Exchange Commission today announced settled charges against Zachary Coburn, the founder of EtherDelta, a digital "token" trading platform. This is the SEC's first enforcement action based on findings that such a platform operated as an unregistered national securities exchange."

Do you guys really think sec has any case against EtherDelta founder?

https://www.sec.gov/news/press-release/2018-258

Does it matter at this point? Coburn already settled. This sets a dangerous precedent for decentralized exchanges though. The SEC has been very busy with crypto.

Exactly, the hammer is slowly closing in, first Shapeshift and not EtherDelta, but the sad news is that its only the American crypto enthusiast will be affected isn't it? I also forget that even one of the hated exchanges, HitBTC are requiring KYC now so probably we will see DEX platform slowly succumbing to the pressures of government bodies. So it doesn't matter at this point if they have a case or not, remember its US and we all know the power they can wield. (BTC-e is one example).

Thanks

Why do DEXes need ICO?
In my opinion if dexes really want to succeed, its developers should remain anonymous and also dont conduct ICO because it attracts gov. regulations

Anyone can share his thoughts here

We're still waiting for a precedent to be set by the courts. Coburn didn't admit or deny the findings. He agreed to pay because the SEC offered him a slap on the wrist.

It'll be interesting if any DEX owners try to fight these kinds of charges in court. Etherdelta was one of the first of these kinds of exchanges. I doubt they'll be the last to be charged.

Lol...i agree sir!...any recommendations on how Decentralise Exchnages should operete in the future?

Yes..we are on same page sir!

He provided a platform for trading (mostly) unregistered securities--he didn't merely write and deploy smart contract code; he maintained a website (UI) and order book and he took fees from each trade. The servers were central points of control/weakness. Open and shut case, I would say.

The SEC might have more difficulty charging the current owners of EtherDelta (which is chugging along just fine!), who I believe are based in China.

We'll probably see anon operators of DEX websites, with devs (if not themselves anon) positioning themselves as sufficiently far 'removed' from the operation of the exchange. Servers positioned in jurisdictions where enforecement is more difficult, etc.

And that's why people shouldn't be throwing around the phrase "decentralised" as they please. The fact that the exchange had a founder, who ran, managed, and operated it, should immediately have made the use of DEX terminology erroneous. The only good thing I suppose was that funds were never centralised but imagine what else he shared with prosecutors (the story claims his fines were actually reduced because he cooperated)? IP addresses? Emails (I don't know if ED uses it)?

Course they had a case. And made it well.

Lol...thanks buddy! They don't collect e-mail address!

Any recommendations on how Decentralised exchanges be setup?

And yet people keep hyping up Binance's attempt to have a "truly" DEX operational in the near future, lol. I wouldn't even be surprised if Binance ends up using people's funds to artificially keep their market liquid. It's an attack factor people will easily take for granted if they are being paid out tokens or whatever for their contributions.

Once more a hint towards how we with LN don't need anything other than our clients to exchange funds from chain to chain without the need of a DEX. We will be our own DEX.

Bitcoin's LN adoption will surely motivate other coins to follow one way or another, and eventually you'll have a wide variety of coins that people can exchange. It will take time, but we have that, and plenty of it.

Wow! Nice one boss...am looking forward to that future!
Thanks for your contributions!

i'm starting to like the distinction between "non-custodial" and "decentralized". fully decentralized trading is a long ways off. every DEX today depends on various forms of centralized administration. :-\

i suppose they do have IP address logs, don't they? but weren't users pushing trade transactions to public ethereum nodes anyway? no emails or other account details on etherdelta.

Be actually decentralised. This has set a precedent no matter what the outcome. If you're an indentifiable person operating something like this then you should stop right now and find something else to do. You will get nailed. I can't imagine these places in their current form are going to last. No one will want to get burnt. We'll need to wait for the real deal.

Not who you're asking, but Bisq seems like the closest thing to a truly decentralized exchange right now:


If nothing else, like Bitcoin, it has no single point of failure unlike EtherDelta.

I think Bisq is great, but it's never going to overtake traditional exchanges. It's strictly P2P -- no automatic orders, no order books. It's really inefficient for price discovery. It's basically a distributed LocalBitcoins.

What we need are decentralized websites, file storage and communications protocols for everything currently run on local servers. I wonder how feasible that is...

Wow!...i agree with u sir!...just that i don't know anything about Bisq.... i will check it out!

Lol

....i see....any way forward?
How decentralise exchange should be setup?

Can't say I've ever been on a website that claimed to have every aspect beyond centralisation. Are there sites built on Maidsafe and that type of thing yet?

If Bisq is as good as it gets, it's still better than anything that came before but its numbers show most people can't resist that whiff of centralisation.

Lol....is true shall....meaning we as people are some how addicted to centralisation.....i believe with time, gradually the addictions will loose it's hold on us!

Yes! Non-custodial is accurate for majority of "DEX". We got to wean off these terms. Took time to wean off "revolutionary" but I think we'll get there with "decentralised" - they have their places but they can be very misleading these days. Fully decentralised is a long way off, definitely agree, and may never be in fact what's desired even if possible. I do feel that we're closer than we think though, with atomic swapping, off-chain channels and 2nd layer stuff, if they can all inter-operate and every architecture is made open source and public domain, we can be close enough.


Yeah, Bisq is as good as it gets (in their own slightly words, doesn't get more decentralised than that, to again use the term!) and that's how I like doing my trades, strictly P2P. The hassle is still a pain point, and that's the hurdle most people (myself included) will spend the most time getting over. Bisq has been seeing growing volumes these past months though, especially BTC/XMR... most early users were probably forced there as their options dwindled on traditional exchanges. But it's picking up for sure.

There was a DEX project last year initially built on Maidsafe, then later abandoned and apparently moving in 2 different directions. I believe it was called NVO (there's a whole backstory to that). Think they (developers) eventually accepted that it was too technically complex for their abilities.

Wow!.. thanks

This case is unique, even though it has been resolved because Zachary Coburn wants to fulfill the demands issued by the SEC. I realized that DEX was anonymous even though the IP log did not find strong evidence. Whereas the SEC assumes that Etherdelta is an exchange that must be subject to SEC rules no matter it's DEX. What is unique about the SEC's purpose? If it's a tax issue, how will they audit DEX, especially the KYC problem? Lol

Lol...thanks ! Seriously.....any recommendations on how Decentralised exchanges be setup?

Your thoughts sir!

yeah i've seen references to LN potentially being used for decentralized altcoin exchange, but i'm not sure how it works or if anyone is working on it. between shapeshift enforcing KYC and non-custodial exchanges either getting busted or implementing KYC themselves, it seems like options are really thinning out for traders. :-\

Yes sir...my thought too!...let see how it plays out...

But i think what triggers it was the ICO they had...i think so!

Yeah they already have a case that is why he made a deal already, he already settled which means he doesn't want to continue any further legal action. Most likely people doing deals like this don't want to lose more money that is why he just settled. It is a smart way of getting away with a court appearance as he is neither confirming or denying the allegations they have brought to him. The sad thing about this one is it will cost him nearly 400,000$ in order to settle the case and let the SEC walk away from him.

Lol...any recommendations on how DEX be setup?

Of course they would have a case against him. If they don't they wouldn't have called a press conference to announce that or release a statement to that effect. The law is there and they expect everyone to comply with the law no matter who you are and whether you recognise the existence of the law. You will still be tried under the same law. This is largely what happen to the proponent of Liberty reserve sometimes in the past which is what led to the end of that at the time.

Its time to start thinking of the worst case scenario as one thing is sure, one of the condition of getting a plea is compliance with the request of shutting down the platform for good. This is the state exercising its power and there is nothing to do to stop it.

As far as I know there are no suspensions or cancellations that took place and if there is one it will only be temporary as it will depend if Zachary Coburn has paid the settlement the government has asked. So DEX will still be in operation and the only thing it has done was damaged his reputation as well as EtherDelta's so it will depend how their customers or investors view the news.

The government site is legit so probably this is true that maybe Etherdelta is not truly registered and not recognized by SEC. I did not know if Etherdelta was base in the USA so i guess with their popularity they could be easily trace their country of origin. We should wait for the update of this report so better we should not keep our crypto assets in Etherdelta wallet.

I totally agree, exchanges seeking expansion through ICOs expose themselves to future persecution as law enforcers can get to easily know who run these platforms as devs and their team leave info in public to prove their legitimacy. Which is why any crypto business wanting to survive long should not mingle with a centralized power as that's the first back door for law enforcers!

Security Exchange Commission(SEC) asking KYC in Decentralized Exchange https://bitcoinexchangeguide.com/idex-decentralized-crypto-exchange-finally-implements-kyc-and-aml-policies/ yeah, need to regulation in dex exchange. Because etherdela also other dex exchange is stolen money in several times i heard.