Business

Derek Tonin

Binance decides to block US users, but gives them backdoor

Users of Binance DEX, the cryptocurrency exchange that causes a lot more questions than answers, saw a very interesting message when logging into the exchange recently. If they were from one of several countries where Binance’s activity could be considered questionable, they’ll be subject to geoblocking starting July 1st.

The Bitcoinist, suspecting that many customers likely didn’t read the message, summed it up like this:

“We can see that you have an IP address from one of these countries.

“From 1st July you won’t be able to access the wallet interface through Binance.org with such an IP address.

“Click here for alternatives and solutions.”

The reason for the geoblock seems tied to a U.S. Securities and Exchange Commission (SEC) investigation into EtherDelta for specifically offering unregistered securities. As an exchange with few limits or controls, Binance DEX offers plenty of those, so the only way to avoid their own prosecution is to distance themselves from the U.S. or other well regulated (or completely suspicious) countries.

The countries that will be geoblocked as of July 1st are: U.S., Albania, Belarus, Bosnia, Burma, Central African Republic, Democratic Republic of Congo, Democratic People’s Republic of Korea, Cote D’Ivoire, the Crimea region of Ukraine, Croatia, Cuba, Herzegovina, Iran, Iraq, Kosovo, Lebanon, Liberia, Libya, Macedonia, Moldova, Serbia, Somalia, Sudan, South Sudan, Syria, Venezuela, Yemen, and Zimbabwe.

American customers can depend on Changpeng Zhao to give them a way around the law though. The alternatives and solutions referenced include using wallets that have Binance’s exchange built in. Also, when a user on Twitter accused him of shilling for VPNs, CZ Binance didn’t even try to deny it:

It’s a strange stance for Binance’s CEO to take that they will block U.S. users to protect themselves from allegations of unregulated trade, but then offer them a way around those blocks to continue their business. The man can’t even put his greed on hold for a day.

This is the natural conclusion of things for Binance. They can’t openly offer business to Americans because their business is not legal in America, but they also can’t refuse the potential to make more money from illegal activity.

Update: A previous version of this article did not specify that Binance DEX was geoblocking users, and simply stated that it was Binance as a whole. The article has been updated to provide further clarity.

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