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Earlier this month, the SEC charged Zachary Coburn, the founder of decentralized exchange (DEXEtherDelta, with operating an unregistered exchange.

According to the Commission, more than 3.6 million orders for ERC-20 tokens have been executed on EtherDelta, including tokens that are securities under the federal securities laws. Based on this language, the SEC is now pinning EtherDelta to ICO’s that they consider security sales, thus charging Coburn with the operation of an illegal secondary market.

This regulatory action has caused ripples across the industry, and other DEXs are beginning to feel the heat. Now, Aphelion (APH), a peer-to-peer exchange protocol, announced that its wallet-based, decentralized exchange built on the NEO (NEO) mainnet, will disable operations following recommendations from their counsel.

“It’s been a perfect storm of bad news: new SEC rulings, disastrous market conditions, NEO tech challenges and diminishing cash flow,” explains Aphelion CEO Ian Holtz in a recent announcement.

While Aphelion emphasizes that it is not folding and that the company will continue, it does concede that it will need to obtain a broker-dealer license through registering as a national exchange or partnering with an organization that has one. Ultimately, this could inject an element of KYC-AML into the platform, destroying its utility as a decentralized exchange.

Aphelion plans to reimburse all users with assets on the platform but notes that its cash flow has been significantly hit by the drop in crypto market prices, especially NEO.

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“NEO (blockchain on which we operate) has been especially hit hard with tech challenges and a falling token value ($195 to $9) which has directly impacted our cash flow and development plan,” according to Holtz.

NEO is currently trading for $7.10, giving the project a $461.5 million market cap and making it the 15th largest cryptocurrency in the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens.

More: Aphelion Disables Mainnet DEX-What it means and where do we go from here?
Related: Crypto Market Dips After the SEC Charges the Founder of EtherDelta

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

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