Poloniex Crypto Exchange Bans US-Based Buyers from Basket of Coins
Several well-established projects will remain out of bounds for US-based traders due to compliance issues and securities laws.
Poloniex will block US-based buyers and traders from a basket of well-known, well-established digital assets, due to doubts whether some of the coins may be considered a security.
Poloniex will stop offering trades for:
- Ignis (ARDR)
- Bytecoin (BCN)
- Decred (DCR)
- GameCredits (GAME)
- GAS (GAS)
- Lisk (LSK)
- Nxt (NXT)
- Omni (OMNI)
- Augur (REP)
The list remains accessible for all international traders. However, the rationale of Poloniex is that US securities law may be in conflict with some of the assets.
“Today’s action is a result of regulatory uncertainty in the US market. Specifically, it is not possible to be certain whether US regulators will consider these assets to be securities,” Poloniex explained.
The move on the side of Poloniex is a step short from delisting. The assets have seen limitations on other platforms as well, including Coinbase, where REP is limited to New York-based buyers. REP is a special case, since the token’s use case can also be interpreted as a form of betting.
The other assets may resemble securities based on their reward ecosystem. GAS, for instance, is the reward-bearing asset for NEO, and is related to owning NEO. Bytecoin is a separate case, a much-disputed asset that also got delisted from Binance a few months ago for extreme volatility and problems with its team.
The question of whether a digital asset represents a security has plagued multiple projects. Usually, projects with a reward system or staking dividends have been counted as having the features of an unregistered security. In the case of LSK, owning coins can lead to rewards for locking up the assets in a staking mechanism.
In general, digital assets are issued without a compliance procedure. There are only a few exceptions, such as the USD Coin (USDC), which is one of the main stablecoins on Poloniex. The exchange, which was formerly fully unregulated and one of the earliest markets for digital assets, has moved on to clear up its act and become compliant after being acquired by the Circle app.