The US securities and exchange commission (SEC) reported earlier that it had sanctioned someone for operating to online venues designed to trade securities using digital currencies – in this instance, bitcoin and litecoin – without registering venues as broker-dealers. Exchanges.
The individual in question is programmer Ethan Burnside – the man responsible for BTC Trading, Corp (“BTC Trading”) – an online platform that allows the buying and selling of registered securities using bitcoin. He is also the guy behind LTC Trading – a company with the exact same premise but using litecoin as the means of exchange. According to the release:
Burnside agreed to be barred from the securities industry with the right to reapply after two years, and he must pay $58,387.07 in disgorgement and prejudgment interest plus a penalty of $10,000.
Andrew M. Calamari, Director of the SEC’s New York Regional Office said:
Burnside operated two online enterprises that weren’t properly registered to engage in the securities business they were conducting… the registration rules are vitally important investor protection provisions, and no exemption applies simply because an entity is operating on the Internet or using a virtual currency in securities transactions.
While operating an unregistered – and therefore unlawful – securities exchange company is obviously a crime, the SEC’s motives have to be questioned here. With the huge amount of securities fraud, illegal stock pumping and the blatant and constant disregard for financial risk as it relates to the global economy seen on Wall Street, why are those charged with regulating the aforementioned spending their time pulling up a programmer for what amounts to less than $60,000? I guess we’ll probably never know the answer, but let us know what you think…