Regulations and the Future of DEXs

[Bowtiesarecool]

With the SEC charging and fining the founder of Etherdelta for unregistered securities trading on the exchange (https://www.coindesk.com/expect-the-sec-to-target-more-token-exchanges-after-etherdelta/), seems like the SEC would rather go for the source of liquidity for unregistered securities rather than track down issuers. With well over 2000 cryptos in the market, makes sense to devote resources in collaring exchanges first (after identifying unregistered securities) rather than spreading themselves too thinly in the hunt for issuers.

So, what happens next?

1. Folks will flock to Malta to open their DEXs?
2. DEXs will issue "WE DON'T SERVE AMERICANS" notice?
3. Get IP restrictions and KYC like IDEX?
4. No orderbook like Airswap?
5. Or we just got sit tight with CEXs again?

 The times truly are changing

[1714663483]

1714663483

[1714663483]

1714663483

[rodalutor]

With the SEC charging and fining the founder of Etherdelta for unregistered securities trading on the exchange (https://www.coindesk.com/expect-the-sec-to-target-more-token-exchanges-after-etherdelta/), seems like the SEC would rather go for the source of liquidity for unregistered securities rather than track down issuers. With well over 2000 cryptos in the market, makes sense to devote resources in collaring exchanges first (after identifying unregistered securities) rather than spreading themselves too thinly in the hunt for issuers.

So, what happens next?

1. Folks will flock to Malta to open their DEXs?
2. DEXs will issue "WE DON'T SERVE AMERICANS" notice?
3. Get IP restrictions and KYC like IDEX?
4. No orderbook like Airswap?
5. Or we just got sit tight with CEXs again?

 The times truly are changing

Time's really are a changing in this regard, I worry that for US citizens there won't be a DEX that they can access in the very near future, the SEC seem determined to track down on any unregulated crypto trading within the US. I suspect that what we'll see is some sort of IP restriction for US citizens, of course that can easily be bypassed but that then creates more issues for the individual if they are to be caught. Thankfully for me I'm European but I do wish that the US market could be unleashed because it could elevate the crypto market to another level.

[sinkfish]

being the world leading country, US seems in a downwards spiral in technology advancement.

[Carter.Cronk]

How to create a dex, remain anonymous and escape persecution, sounds like a job for an anonymous decentralised blockchain of some sort.

[Lighthouze]

The US and Chinese markets are very important in the crypto space and as such, the actions of the SEC will regards exchanges and crypto in general will always affect the space adversely. With clamp down on DEXes by the SEC, it's obvious soon residents of the US will not be able to access them anymore. In times like this, it's hard to be a US resident due to the flippant restrictions. Times are really changing and the regulations we crave in the space will come at a price.

[Bowtiesarecool]

How to create a dex, remain anonymous and escape persecution, sounds like a job for an anonymous decentralised blockchain of some sort.

Most folks in crypto try to model themselves after Vitalik, Lee, and the likes (including McAfee). They've forgotten that Satoshi chose to remain anonymous from the get-go. You can innovate and disrupt without being targeted

[Herlina]

With the SEC charging and fining the founder of Etherdelta for unregistered securities trading on the exchange (https://www.coindesk.com/expect-the-sec-to-target-more-token-exchanges-after-etherdelta/), seems like the SEC would rather go for the source of liquidity for unregistered securities rather than track down issuers. With well over 2000 cryptos in the market, makes sense to devote resources in collaring exchanges first (after identifying unregistered securities) rather than spreading themselves too thinly in the hunt for issuers.

So, what happens next?

1. Folks will flock to Malta to open their DEXs?
2. DEXs will issue "WE DON'T SERVE AMERICANS" notice?
3. Get IP restrictions and KYC like IDEX?
4. No orderbook like Airswap?
5. Or we just got sit tight with CEXs again?

 The times truly are changing

Actually, we still don't have a decentralized exchange that can't be controlled by one party, teams that claim their platforms are decentralized can still be pressured by regulation and five things above can happen because they avoid legal risks

[ecnalubma]

It seems that U.S want to take control of everything, they threat DEX's like a deepweb. Thank god I'm not a U.S citizen, soon DEX's will flock in some countries where regulations are not too harsh maybe they need to cooperate or self regulate their companies so that the Goverment will not give them headaches.

[Gasolindance]

I just think, that DEXs would be so good in one or two years, but not now. This thing need some yime for make the basis and rise up after hardworking time.

[CryptoAssasin]

I felt sorry for US citizens if there will be an IP ban for them when engaging with DEX. I could say that SEC only protecting its citizen from anonymous hacking and we dont know the whole story right? Etherdelta surely cross the line and might not following the set rules for DEX. There are a lot of DEX out there but why only etherdelta was triggered? One thing is for sure, they press the red button that leads them to be this scenario.

[Saint1990]

There are so many advantage of DEX platforms such as full custody of money, privacy, less risk from the authorities, platform to buy tokens before token launch on the CEX. But due to US authority SEC's interference IDEX is launching AML? KYC on their platform due to thread of getting closed. as per the research 10% of Americans invest in cryptocurrencies and this news going to impact the market very badly. Now looks like other famous DEX such as KYBER netwrok, Openledger Dex, Forkdelta etc will also go on the same path.

[Bowtiesarecool]

Here's the million dollar questions. Does SEC has international jurisdiction to prosecute? Let say a citizen of Estonia or Malta or even Seychelles launches a DEX and doesn't block Americans from using it. Is the SEC going to have the creator extradited for persecution?

[Dodoymabs]

With the SEC charging and fining the founder of Etherdelta for unregistered securities trading on the exchange (https://www.coindesk.com/expect-the-sec-to-target-more-token-exchanges-after-etherdelta/), seems like the SEC would rather go for the source of liquidity for unregistered securities rather than track down issuers. With well over 2000 cryptos in the market, makes sense to devote resources in collaring exchanges first (after identifying unregistered securities) rather than spreading themselves too thinly in the hunt for issuers.

So, what happens next?

1. Folks will flock to Malta to open their DEXs?
2. DEXs will issue "WE DON'T SERVE AMERICANS" notice?
3. Get IP restrictions and KYC like IDEX?
4. No orderbook like Airswap?
5. Or we just got sit tight with CEXs again?

 The times truly are changing

The government really find ways to solved the said issues which we slowly feel it. But I don't think they can easily solve because cryptocurrencies also finding ways to avoid some government rules. We can still have so many options to take because there's a lot of exchanges that we can used.

[Yaunfitda]

Yes, I agree. Exchanges will go to Malta for safe haven, (Binance and OKex already did, and I read the Changelly as well). And then more regulatory pressure coming from USA, so its either bow down to US, close your trading platform or require KYC for you customers, which means your business is going down as well. Time has changed a lot, so its a bit more scary as others may have thought it to be.

[HellDiverUK]

Decentralized exchange is the goal and future of crypto, where anyone can create a buy and sell platform without area restrictions, if the SEC has limited its better to get out of America and let them lag behind us

[Crypto_lion]

As of right now the decentralized exchanges are not very mature and their isn't much regulation for the exchanges .They operate with their own regulations .It will take some years for regulators to occur .

[Teraboy]

There are so many advantage of DEX platforms such as full custody of money, privacy, less risk from the authorities, platform to buy tokens before token launch on the CEX. But due to US authority SEC's interference IDEX is launching AML? KYC on their platform due to thread of getting closed. as per the research 10% of Americans invest in cryptocurrencies and this news going to impact the market very badly. Now looks like other famous DEX such as KYBER netwrok, Openledger Dex, Forkdelta etc will also go on the same path.

I hope that any other DEX will never try to put their business on US. SEC is suck and how this institution was thinking if everything can be controlled by them. DEX will still alive. It can't even do anything to the  bitconnect because that was not based on US.

[audaciousbeing]

Leaving SEC out of this, when any government agency is ready to go after crypto, they don't need to waste their energy going after individuals. It the platforms that makes crypto thrives that they attack and when they do that, they have cut the head which is what is happening in the case of EtherDelta but the consolation is that, as they cut off one, others are springing up trying to learn from what led to the fall of the latter. Just like Op suggested, these are the several options that would be considered by any new platform ready to operate any form of exchange platforms.

[acmrl]

I read news for idex, they are bringing kyc soon. I dont like kyc for dex because it is not suitable for the nature of work, still we are giving all data to everybody.

[Rune]

Regulations will kill all DEX if they become large enough just like the model I see with Edgeless you will have to prove your identity before you can use the DEX.
This effectively kills the DEX making it just another exchange you need to sign up for and a trust system.