Binance’s new decentralized exchange has been gathering momentum, and tokens, in recent weeks, but users in almost 30 countries worldwide, including the USA, will not be able to experience the platform from July 1 after the platform was forced to bow to regulatory pressure and block them. Trading and even accessing wallets through Binance DEX will no longer be available to users with IP addresses from the affected countries, illustrating once again the difference between a decentralized exchange and a non-custodial exchange.
Americans and South Koreans Miss Out
Binance revealed the list of impacted countries as users from those nations began logging in, including crypto-loving nations such as the USA and South Korea, warning them that they only had a month left to use the platform:
Decentralized exchanges have been targeted by the Securities and Exchange commission in recent months, with IDEX and EtherDelta both impacted in their attempts to circumnavigate securities law and serve customers worldwide, and so it is no surprise to see the exchange putting measures in place from the outset. However, moves such as this are reminiscent of IDEX being forced to ban New York-registered IP addresses last year, a move that opened the lid on the truly decentralized nature, or otherwise, of such exchanges, which many thought were free of government interference.
Time to Rebrand Decentralized Exchanges
As was discussed in the IDEX case, the decentralized aspect of such exchanges refers to the storage of user funds and little else – a centralized exchange holds your funds in a hot wallet, while a decentralized exchange allows you to hold them yourself while you trade. Using a term like ‘non-custodial’ to describe these exchanges instead would remove the confusion that invites criticism of platforms who never claimed to be free of external influence in the first place. Until something like this changes, people will continue to be surprised that so-called decentralized exchanges face the same kind of oversight as regular exchanges.