For the first time, an ethereum based decentralized exchange has decided to ban US residents from accessing its website.
“Beginning July 8, 2019 (9:00 AM EST) US citizens, domiciliaries or users from US IPs will no longer be able to use Bancor’s web application to convert tokens,” they say.
The relatively small exchange is currently handling only $1.6 million in trading volumes, close to $1.2 million just in BNT/ETH.
BNT, Bancor’s token, has gained today close to 3%, with its holders apparently unfazed by this announcement.
That may be in part because this is a smart contracts based broker that allows you to swap most ERC20 tokens for eth or other tokens.
“We would like to clarify that this functionality will be blocked to users accessing the website, which offers an interface to blockchain activity,” they say, further adding:
“As the Bancor Liquidity Network is a collection of smart contracts on the blockchain, and a non-custodial system, we cannot restrict users from accessing the blockchain itself. This cannot be blocked.”
Raw usage of this system however would probably be difficult for most, but you could potentially mirror the website under a different domain name and remove any IP blocking restrictions.
Yet Americans who want to proceed would probably just use VPN, with it unclear why exactly Bancor took this decision. They say:
“In light of increased regulatory uncertainty, we believe that restricting US-based users from executing conversions via our web interface is the most judicious decision for all members of Bancor’s ecosystem at this time.”
SEC takes the view that if a token is a security, then any exchange where the token can be traded has to register with SEC.
The fact Bancor can take such action, however, does indicate they’re not a very decentralized exchange or broker, so SEC’s actions may well push towards more decentralization.