On November 21st, Aphelion’s CEO Ian Holtz released a statement announcing the Aphelion MainNet decentralized exchange (DEX) would cease trading, effective immediately. The CEO urged Aphelion users to cancel any open orders and withdraw tokens from any contract/DEX balances back into their wallets.
Holtz also noted that users who’d committed APH tokens for the P2P fee redistribution program should claim those assets back to their wallets. The team doesn’t plan to disable the commit feature anytime soon, but if they do, APH claims will automatically be processed on behalf of the users.
Since Aphelion’s launch on October 10th, just under 3,500 APH had been collected in fees, of which around 80% had been redistributed to those who committed APH. About 700 APH in organizational fees have been collected, which will either remain in the smart contract until the MainNet is live again, or burnt.
Additionally, any GAS that’s been accrued by those who have fractions of NEO on the contract, will be manually airdropped to users.
Reasons for taking MainNet offline
Aphelion has noted reasons for taking the Aphelion DEX off MainNet include “new SEC rulings, disastrous market conditions, NEO tech challenges and diminishing cash flow.”
With regards to the new U.S. Securities and Exchange Commission (SEC) ruling against the EtherDelta DEX, “non-custodial cryptocurrency exchanges [that allow] users to trade are firmly within [the] scope” of the SEC. Aphelion had previously been advised they were not in the regulatory purview of the SEC, but have since been advised to “cease trading activities immediately and identify a path towards compliance.”
As of November 21st, the SEC has yet to contact Aphelion.
Since Aphelion’s public token sale in November of 2017, the cryptocurrency market cap has declined sharply, which directly impacted Aphelion’s cash flow and development plan. Holtz stated development of the mobile platform has required the team to tap into its NEO holdings from its token sale, which values have decreased in stride with the broader market.
With regards to “NEO tech challenges,” Holtz mentioned, “there have been several instances we’ve had to pull our development team off the DEX to solve for limitations and challenges of the NEO blockchain.”
Lastly, Holtz iterated the level of current NEP-5 token trading volume did not meet the team’s projections, which were developed around the time of its token sale in November of 2017. Coupled with the current market cap, Aphelion can’t use the APH fees from trading, and organization tokens to fund the platform to “the next level.”
With regards to compliance, Holtz iterates the path toward compliance lies in one of the following three methods to either:
- Acquire a broker-dealer financial services group,
- Enable full KYC/AML, or
- Integrate Aphelion technology with a project nearer compliance.
In the meantime, Aphelion aims to remain in operation, but “not develop towards cross-chain until [they] find a compliance solution,” at which point the team will evaluate its budget and scope. The Aphelion wallet will stay live across its desktop, Android, iOS, and web platforms. Additionally, the DEX will remain live on TestNet.