Effective July 8, 2019, US residents will no longer be able to access Bancor’s web application to convert tokens, as confirmed in their blog post yesterday June 18.
Bancor, a decentralized exchange platform, came up with the decision citing increased regulatory uncertainty. The post further stated that this move would enable the Bancor community to innovate faster with better clarity.
However, the statement clarified that users from the US can still log-in, hold tokens and transfer tokens from the US. It will only be the convert feature that will be turned off.
Bancor notes: “ “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.”
Challenges of operating a decentralized exchange (DEX) service in the US
While it was not really clear why Bancor has come up with this decision, the regulatory troubles faced by another decentralized exchange (DEX) Etherdelta could better illustrate the challenges of operating these services in the US.
In November 2018, the US Securities and Exchange Commission closed down another crypto trading platform Etherdelta and charged its owner Zachary Coburn with operating an unregistered securities trading platform and more than $300,000 fine.
In a piece of related news, the Financial Task Force (FATF) is expected to publish new international recommendations on June 21 to clarify how member nations should oversee cryptocurrencies, according to the report by Bloomberg.
The SEC is the Securities and Exchange Commission of the United States. The agency was created by Congress in 1934 and is now the main organization that controls and regulates all operations on securities markets.
To achieve its mandate of creating transparency, the SEC requires public and other regulated companies to provide quarterly and annual reports that detail the working process of the company during that period of time. All reports are available to the public.
Nowadays, one of the main tasks of the SEC is to investigate the cryptocurrency market and investment facilities related to it in order to reveal any illegal actions, such as selling securities under the guise of tokens. So far, the SEC will review documents from 100 companies.