Will Other DEX's Follow Step Due to Regulations?
Bancor was one of the most successful ICOs of all time. The project managed to raise a whopping $157 M in Ethereum in 2017, in under 3 hours. Bancor served as a DEX of sorts and allowed automatic exchange of different ERC20 tokens in their network and later added support for EOS tokens.
While some may claim that Bancor is not truly a DEX, its platform allows easy exchange of tokens in its ecosystem. It calculates the price of assets and tokens in its network with the use of a price discovery algorithm and liquidity pool. This removes the need for any human intervention behind the scenes and why it qualifies as a DEX.
In a surprise announcement to many, Bancor recently announced that they are planning on restricting U.S. users. They will begin blocking U.S. based IPs from accessing their network starting July 8th, citing regulatory concerns. As per the announcement:
"If you have a Bancor Wallet, you will still be able to log-in, hold tokens, and transfer tokens from the United States. Only the convert functionality will be disabled. This decision has been made in light of increased regulatory uncertainty; at this time, we believe this is the most judicious decision for all the members of our ecosystem. This will enable the Bancor community and ecosystem to innovate faster and with greater clarity.
We would like to clarify that this functionality will be blocked to users accessing the website bancor.network, which offers an interface to blockchain activity. 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."
Will Other DEX's Follow?
With uncertain regulation in place in the United States, exchanges have good reason to be concerned. DEXs should be just as worried. There has been no word yet from other prominent DEXs such as EtherDelta or Binance DEX regarding their plans on dealing with U.S. regulation.
Hypothetically we could very likely hear a similar announcement from them in the near future.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado