IDEX Exchange Blocks NY State IP Addresses

IDEX Exchange Blocks NY State IP Addresses

The IDEX exchange has given indications that it is limiting trading for certain IP addresses, enforcing curbs similar to those of centralized exchanges. IDEX, through the Aurora project team, announced it would start blocking IP addresses as of October 25:

https://twitter.com/Aurora_dao/status/1054917418621984768

The decision has mystified the crypto community, where IDEX has been a source of free trading for a vast array of tokens. However, the decentralized app (dApp) is not without its limitations. The stringent New York State regulations have forced exchanges to abandon the area in the past, as in the case of Poloniex and Bittrex. Compliance has simply proven too expensive for market operators.

The move shows that even a decentralized exchange (DEX) would not be exempt from some form of trading regulation and limitation. IDEX is a relatively niche platform despite being the leading decentralized market based on the Ethereum blockchain. At best, it has a few thousand users daily, which is just a fraction of the traders and accounts for centralized exchanges. The DEX has a turnover of about 5,000 ETH in 24 hours.

https://twitter.com/VentureCoinist/status/1055124619332591617

Some traders have noted that DEXs are not used just because of being decentralized but because they immediately list new ERC-20 tokens, giving liquidity to initial coin offering (ICO) tokens.

Other DEXs see much lower traffic. The second-largest dApp, ForkDelta, had 681 traders in the past 24 hours and a turnover of about 780 ETH. Bancor, a decentralized marketplace claiming to provide liquidity to many tokens, listed only 162 users and a turnover of merely 10 ETH.

Yet, DEXs are sometimes seen as the answer to market limitations, with the possibility of immediate listing and trading. They have seen more significant volumes for certain tokens and projects.

IDEX is, in a way, semi-decentralized. The funds of users are held in a smart contract, not in a central wallet. However, the exchange has a decision-making capability for its trading rules. The trading interface means Aurora and IDEX can still be held responsible for offering services. At the same time, 0x, ForkDelta, and EtherDelta allow direct communication with a smart contract and have no centralized servers, which, theoretically, precludes their being held responsible.

Some Reddit users are skeptical of IDEX due for its potential use for money laundering.

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