Aphelion, a decentralized exchanged based on the NEO cryptocurrency, decided to stop trading operations in its platform. This with the objective of not incurring in possible sanctions that could get them fined by the SEC. The Securities and Exchange Commission has now turned into this kind of exchanges. It has already fined the EtherDelta exchange with more than 400,000 dollars.
Aphelion Closes Its Doors
There is nothing worse than to suffer legality issues when you have already got through and ICO. All the effort of trying to do everything by the book, and in the middle road, rules change. That is what Aphelion is facing right now. Aphelion is a decentralized exchange, this means that is just a program running. This smart contract manages transactions between users.
They decided to close its doors recently, influenced by the action that the SEC took against another decentralized exchange called EtherDelta. In an explicative article they state:
“It is with great disappointment that we must report, Aphelion has made the business decision to disable mainnet trading effective immediately.”
They disclosed the whole amount of money the exchange had. This obviously to show the SEC that they haven’t made any gains of the trades made and that fees will be burned in the same exchange. They declare that:
“DEX has collected just under 3500 APH in fees — 80% of which have been or will be redistributed to the community. This leaves roughly 700 APH in organization collected fees (around $20 at current rates). We’ve not touched those…meaning no profits have been made”
Decentralized Exchanges Beware
The Securities and Exchange Commision started an all-out attack on unregulated securities. Mostly this new focus falls on Initial Coin Offerings. But decentralized exchanges are also on the sight of this organization. They have already fined two Initial Coin Offerings to pay more than $250K in fines and also give back the investment to their customers. But the reason that made them really turn off the platform was the action against Etherdelta.
In the document, they state:
“Recent SEC action against EtherDelta sets a new precedent that directly impacts our trading platform. In short, the SEC ruled that non-custodial cryptocurrency exchanges allowing users to trade are firmly within their scope”
Finally, they expect that the SEC will act in the same way with every exchange, centralized or decentralized. The geographical localization does not matter. This puts in risk every exchange that can be accessed by US citizens.