Amid escalating regulatory challenges in the U.S., many cryptocurrency founders are considering geofencing as a last-resort strategy for compliance.
Jake Chervinsky, chief legal officer at Variant Fund, highlighted this trend in a recent post, where he explained that geofencing involves restricting access to services based on a user’s geographical location.
By establishing a virtual barrier, companies can prevent users from regions with strict regulations—like the U.S.—from accessing their platforms. Chervinsky noted that while this may be a necessary step for some firms, it represents a significant withdrawal from the American market. He remarked, “This is a drastic measure, but sometimes it’s unavoidable.”
In 2023, 17 regions tightened their cryptocurrency regulations, impacting about 70% of global crypto activity, according to TRM Labs. Notably, some protocols, such as the rebranded Sky (formerly Maker), have faced backlash for blocking VPN access to comply with U.S. regulations. Binance also employs geofencing, notifying users from U.S. IP addresses that the site is unavailable.
Chervinsky’s guide suggests best practices for geofencing, including the use of IP and GPS data to identify users and employing multiple blocking techniques. He also advises reducing reliance on U.S.-based infrastructure to better navigate these regulatory waters. While geofencing can help companies enter new markets while maintaining compliance, it is ultimately seen as a costly and extreme tactic in the face of U.S. regulatory demands.
FTX creditors in the Eurozone will receive repayments in euros based on 2022 closure prices, plus processing fees of up to 30%.
Anatoly Yakovenko, CEO and co-founder of Solana, has been openly critical of the Biden administration, particularly regarding its failure to foster job creation.
Mark Cuban, the billionaire entrepreneur, expressed concerns about SEC Chairman Gary Gensler’s regulatory approach, claiming it could have prevented the collapses of FTX and Three Arrows Capital (3AC).
A class action lawsuit against Nvidia, alleging that the company deceived investors regarding the impact of crypto mining on its revenues in 2017-2018, is seeking to move forward in the U.S. Supreme Court.