Halting Utility Token Trading and Preparing for the Next Chapter
Since founding ERC dEX, our mission has been to create the most secure, robust experience for trading utility tokens on Ethereum. In light of the new developments in regulation and enforcement, we have decided to turn our focus entirely on the next chapter for ERC dEX: providing legally-compliant markets for security tokens.
As a US-based company, the regulatory climate impacts our business. We have always held the mantra “lean in to regulation” — embracing and taking the necessary steps to abide by securities laws and regulations, even though the exact interpretation has been somewhat ambiguous. However, the SEC has issued new guidelines, and we believe it is now time for us to take the next steps and become a fully licensed and registered exchange for compliant security tokens.
We believe utility tokens are useful and needed. ERC dEX itself is built around a utility token and we’ve seen great progress from many Ethereum-based companies that have valid use cases for their tokens. However, we believe an overwhelming number of companies and organizations will opt to issue security tokens in the future, and this is the market we are best suited to service in the current environment.
This will be the first of several posts we will make regarding our future plans. For now, we’ll let you know what to expect in the near-term…
Trading will Halt
As of Friday, November 23rd, at 5pm CST, ERC dEX will halt trading of all tokens. At this time, the relayer will be taken offline until further notice. What does this mean for you, the trader? You are not required to do anything in particular. In fact, there is no need to cancel orders, as your orders cannot be filled any other way than through our platform.
We want to take this time to sincerely thank all of the traders who have used our platform — especially our dedicated alpha, beta and v2 beta testers. You all have been tremendous! We hope to see you back on the platform when we open up trading for security tokens.
The Next Chapter
We will continue working on becoming legally compliant to list security tokens. As of now, we have signed partnership agreements with know your customer (KYC) and anti-money laundering (AML) service providers Onfido and ComplyAdvantage. We’re also in talks with a broker-dealer and are working to become a licensed alternative trading system (ATS). We’ve also started talking with primary token issuers, and have already signed an agreement with Securitize to list tokens they issue.
In the near future, we will open up KYC applications to users who wish to become pre-approved for trading. This will be a required process for all users who wish to trade on our platform. We encourage users to sign up early while there is no wait time for applications to be processed.
The best way to stay up-to-date with the latest news regarding the launch of our securities platform is to subscribe to our newsletter.
As always, thank you for your continued support and interest in ERC dEX!