SEC v. EtherDelta {Big Picture}

Crypto for Regulators (CfR), Part 3 — Individual Liability

CleanApp
CleanApp
Nov 14, 2018 · 4 min read
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SEC’s newly created cyber unit, Robert Cohn [sic, Robert Cohen], exclusively told Forbes that using any blockchain to create an exchange without central operations doesn’t remove the original creator’s responsibility.

Regulate the Chainsmith; Not the Chain

Over an 18-month period, EtherDelta’s users executed more than 3.6 million orders for ERC20 tokens, including tokens that are securities under the federal securities laws.

Without admitting or denying the findings, Coburn consented to the order and agreed to pay $300,000 in disgorgement plus $13,000 in prejudgment interest and a $75,000 penalty.

Why Is SEC Targeting CryptoCats?

Corporations can engage in jurisdiction shopping and asset shifting. They can remain immune to U.S. enforcement reach indefinitely. Individuals will want to go back to the United States. When they do, a judicial judgment or administrative sanction against an individual can serve as an extremely effective lever of influence over the corporate form.

You can’t imprison a corporation; but you can imprison a CEO. So the threat of individual criminal or prolonged civil/administrative enforcement is a very strong compliance stick.

What’s Next?

Crypto Law Review

A journal pushing the bounds of our legal imaginaries…

CleanApp

Written by

CleanApp

Small NGO with a big patent urging BigTech & Crypto to enable trash/hazard reporting & open source data. "The Wi-Fi & Bluetooth of TrashTech" - cleanapp.io.

Crypto Law Review

A journal pushing the bounds of our legal imaginaries, on-chain, off-chain, and against the chain.

CleanApp

Written by

CleanApp

Small NGO with a big patent urging BigTech & Crypto to enable trash/hazard reporting & open source data. "The Wi-Fi & Bluetooth of TrashTech" - cleanapp.io.

Crypto Law Review

A journal pushing the bounds of our legal imaginaries, on-chain, off-chain, and against the chain.

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