Zachary Coburn, founder of Etherdelta, is paying the price for operating a DEX (decentralized crypto exchange) within the US. DEX, which has replaced Etherdelta and its Forkdelta spin-off as the most popular platform of its kind, announced that it would introduce KYC, and has barred residents of New York and a handful of other states from accessing the site.
Despite the severity of the fine Coburn was forced to pay, the founder could have fared worse. The SEC appears to have gone relatively easy on him due to his cooperation and willingness to pay any penalties levied. “The Commission considered remedial acts promptly undertaken by Respondent and cooperation afforded the Commission staff,” acknowledges the report. “Coburn’s efforts facilitated the staff’s investigation involving an emerging technology.” While Etherdelta was a small exchange in the cryptocurrency landscape even at its peak, the ramifications of the SEC’s actions are sure to resonate far and wide. Exchanges, both centralized and decentralized, will be carefully examining their KYC and token listing policies in light of today’s report to ensure they aren’t next in the line of fire.