EtherDelta
| EtherDelta | |
| |
| Founded | 2016 |
|---|---|
| Headquarters | Washington, D.C. |
| Key People | Zachary Coburn, Founder |
| Products | Decentralized (DEX) digital assets exchange |
| @EtherDelta | |
| Website | EtherDelta Exchange |
EtherDelta is a decentralized cryptocurrency exchange founded by Zachary Coburn.[1] It is primarily a market for ERC-20 Tokens, which are based on the Ethereum blockchain.[2]
EtherDelta is a decentralized exchange, a type of exchange that is sometimes referred to as a "DEX" exchange. This means that it is not based in a single location or on a single server. Instead, it relies on smart contracts to automatically execute trades between users on a distributed ledger. In theory, this eliminates the possibility of a targeted hacking attack because there is no single point in the exchange that manages trades (though this does not necessarily mean that it is impossible for a DEX exchange to get hacked). This can also make it difficult for regulatory bodies to enforce trading and tax laws on funds earned through trading on a DEX exchange.[3]
Background[edit]
2017 hacking attack[edit]
In December 2017, EtherDelta was the victim of a hacking attack. The hacker (or hackers) accessed the exchange's DNS server and replaced its web domain with a convincing fake - in other words, the hacker hijacked EtherDelta's web address so that users attempting to access the exchange were instead taken to a fake website. Then, when the users attempted to trade their digital tokens, the tokens went into the wallet of the hacker, from which they were never returned.[4]
EtherDelta confirmed the attack on its official Twitter account, advising users not to use the exchange until further notice. The stolen tokens were allegedly traced to this wallet address on the Ethereum blockchain.[5]
SEC litigation[edit]
In November 2018, the U.S. Securities and Exchange Commission (SEC) announced that it had settled with Zachary Coburn regarding a lawsuit the commission had brought against him and EtherDelta for "operating an unregistered exchange."[6] The settlement followed the publication of the SEC's 2017 "DAO Report," which concluded that certain digital assets, such as ERC-20 tokens, are securities, making them regulatable by the SEC. The SEC said that all platforms trading such assets are required to register as securities exchanges with the SEC, which EtherDelta did not do. [7] Although Coburn did not officially confirm or deny the SEC's accusations, he agreed to settle with the regulator by paying $300,000 in disgorgement, as well as a $75,000 penalty and $13,000 in prejudgement interest.[8]
References[edit]
- ↑ SEC Charges EtherDelta Founder Over 'Unregistered Securities Exchange'. Coindesk.
- ↑ SEC Charges EtherDelta Founder for Operating Unregistered Exchange. Wall Street Journal.
- ↑ Understanding Decentralized Exchanges. Hackernoon.
- ↑ One Week On from the Etherdelta Hack, Funds Are Still Being Stolen. Bitcoin.com.
- ↑ Cryptocurrency exchange EtherDelta got replaced with a fake site that steals your money. Mashable.
- ↑ SEC Charges EtherDelta Founder With Operating an Unregistered Exchange. U.S. Securities and Exchange Commission.
- ↑ SEC Charges EtherDelta Founder for Operating Unregistered Exchange. Wall Street Journal.
- ↑ In EtherDelta Case, SEC Hints Most Ethereum Based Tokens are Securities. NewsBTC.