DeFi Protocols on Solana Block Access for British Users Due to FCA Requirements
Date: 2023-10-23 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
Marinade Finance and Orca Finance Implement Geoblocking for British Users
DeFi (Decentralized Finance) has become a significant part of the world of cryptocurrencies and blockchain. However, recently, two leading DeFi protocols on the Solana network have taken unexpected measures by restricting access for British users. Marinade Finance and Orca Finance have introduced geoblocking in response to the requirements of the British regulator, the Financial Conduct Authority (FCA). According to data from DeFi Llama, Marinade's total value locked (TVL) stands at an impressive $245.39 million, with Solana's network having an overall TVL of $349.33 million. Orca Finance, in turn, has blocked access for British users, despite having over $49 million TVL. Let's explore the potential reasons behind these actions and their implications for the global cryptocurrency industry.
British Regulators and New Cryptocurrency Advertising Rules
The reason behind the blockage of British users' access to Marinade Finance and Orca Finance stems from new rules governing cryptocurrency advertising in the United Kingdom, which came into effect on October 8th. The FCA has started labeling companies that fail to adhere to these rules. According to the new regulations, any organization seeking to promote digital assets must be authorized or registered with the FCA, or their campaign must be approved by an authorized firm.
Of particular concern are those entities that do not meet these requirements. Non-compliance with FCA regulations is considered a criminal offense and is subject to penalties of "unlimited fines and/or imprisonment for up to two years." These measures have serious consequences for companies providing cryptocurrency and decentralized finance services.
Impact on the Decentralized World of Cryptocurrencies
The restriction of access for British users by Marinade Finance and Orca Finance underscores the importance of compliance with regulatory norms in the realm of cryptocurrency services. This move may draw the attention of regulators in other parts of the world, encouraging them to take similar measures to ensure compliance with the law in their respective jurisdictions. As a result, decentralized finance and cryptocurrency protocols may face new challenges in terms of regulation.
Market Reaction and Consequences
The market's response to these events remains uncertain. The limitation of access for British users may affect the overall liquidity and interest in these DeFi protocols, but it could also create opportunities for other projects and networks. It's important to note that cryptocurrency regulations can vary significantly from one country to another, creating a complex environment for companies operating on a global scale.
Other Implications for the Crypto Community
This blockade also raises questions about the transparency and purpose of decentralized finance. In the DeFi sphere, the emphasis is on autonomy and the absence of central control. However, cases like this may challenge this principle and prompt the community and projects to consider how they can comply with local and international norms and requirements.
