On Tuesday, the decentralized exchange IDEX posted a tweet, stating that as of Oct. 25 it will prohibit users from New York to trade through the dex.
IDEX is the number one decentralized exchange by trading volumes, daily users and the number of transactions.
***Notice: #IDEX will begin blocking new orders from users with New York State IP addresses on Thursday, October 25th (6pm UTC). Cancels and withdrawals will remain active.
— Aurora (IDEX) *Not Giving Away ETH* (@Aurora_dao) October 24, 2018
The prohibition explained
As IDEX told U.Today exclusively, this is due to:
“BitLicense regulation that has been in place since 2014. IDEX is not compliant with the BitLicense and cannot offer services to NY users.”
In the IDEX whitepaper, the exchange is described as:
“a hybrid, semi-decentralized exchange that provides a trustless, real-time, high-throughput trading experience in conjunction with Blockchain based settlement.”
This seems to be a correct adjustment since IDEX is positioned as a decentralized exchange. This is what the numerous comments under the tweet were about. Users in Twitter are insisting that the word ‘decentralized’ should be removed from the company’s title.
It would be nice if you will remove the word "Decentralized" from your exchange description. Thank YOU. #CentralizedExchange #IDEX #Hypocrites
— BlessCrypto (@EnCryptoSign) October 24, 2018
Complying with regulatory rules
The BitLicense the IDEX rep was referring to is basically a license that any company in the crypto area working in New York must obtain from the NY Department of Financial Services (NYDFS). Same is applied to companies providing services to NY citizens.
To what extent are decentralized crypto exchanges decentralized?
— Joseph Young (@iamjosephyoung) October 24, 2018
The answer to that question is not so much. IDEX just blocked users from New York.
Merely settling trade orders on Ethereum =/ decentralized. There should not be any central entity with significant power.
About IDEX
IDEX is founded by the Aurora crypto platform, Aurora DAO is one of the dex’s basic coins. It operates on Snowglobe, a fully decentralized exchange protocol.
Vladislav Sopov
Dan Burgin