The largest decentralized cryptocurrency exchange by trade volume Aurora IDEX, which is based on the Ethereum blockchain, has announced on Twitter that it will begin blacklisting all IP addresses from New York starting from today Oct. 25 (6:00 PM GMT).
New Yorkers will still be able to withdraw their funds but will be unable to trade Ethereum-based tokens listed on the platform.
The decision to ban traders in New York caused an uproar in the cryptocurrency community. A number of users responded to the tweet showing disappointments at the exchange’s decision. Larry Cermak, head analyst at Diar, questioned whether the exchange is really decentralized.
“IDEX, a self-proclaimed decentralized exchange, said that it will start blocking new orders from New York IP addresses from tomorrow. If any decentralized exchange can be pressured to block anyone, it is not actually decentralized,” Cermak said on Twitter.
Since traders have to deposit coins on the exchange, the platform feels and looks like a centralized exchange.
Stringent regulatory requirements in NYC
Most crypto exchanges have boycotted New York due to its harsh stance toward cryptocurrencies. The state is known for its BitLicense regulatory framework, which is the first comprehensive cryptocurrency regulatory regime proposed in the US. The framework outlines strict legal requirements for a crypto startup to operate in the state.
Some sources familiar with the matter have also revealed that IDEX has admitted to not being compliant with the state’s regulatory requirements.
IDEX is the most popular decentralized cryptocurrency exchange that has been gaining positive attention lately. The platform is focused exclusively on the peer-to-peer trading of the ERC-20 tokens. It supports real-time trading in more than 200 tokens on the Ethereum smart contract network. This means it doesn’t support trading in Bitcoin (BTC).