Crypto Market Shrinks 5% As SEC Opens Second Front In Exchange Crackdown

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The U.S. Securities and Exchange Commission (SEC) has opened a second front in its crypto exchange crackdown by imposing sanctions on two digital asset trading platforms, causing the cryptocurrency market cap to shrink by 5%. The move, which was announced on Thursday, comes as the agency is cracking down on exchanges that are not registered as broker-dealers or alternative trading systems and are operating without the proper regulatory oversight. The SEC said that it had reached settlements with two platforms, EtherDelta and Zachary Coburn, that had been found to be operating as unregistered national securities exchanges. EtherDelta, which is owned by Coburn, had been operating since 2016 and had facilitated more than 3.6 million orders for digital asset securities, according to the SEC. Under the settlement, Coburn will pay $300,000 in penalties and disgorgement and will be banned from serving as an officer or director of a public company for five years. The SEC said that its actions should serve as a warning to other exchanges that are not operating under the proper regulations. The agency emphasized that its actions were not intended to stifle innovation in the cryptocurrency space, but that “we will continue to fight against those who seek to skirt the registration requirements for digital asset exchanges.”