As of 29 September, the leading DEX aggregator that allows DeFi users to make the most convenient trades on various Ethereum-based platforms, 1INCH, began restricting the use of the platform to its US users.
Summary
1inch, new terms of use for the platform
The 1inch network had already included the restriction for US users in the platform’s terms of use in April, but has now embarked on geofencing, i.e. a virtual perimeter associated with a real-world geographical area.
In this case, users belonging to the zone are identified and devices or IP addresses that fall within the virtual fence created by 1inch Network are blocked.
The restrictive strategy is designed to pave the way for the platform’s launch of a new product that would only target US-based users.
Crypto regulations in the US
This solution stems from the fact that US regulations are relatively strict on the types of investments available to stakeholders, particularly where there is no full provision of know-your-customer information to ensure anti-money laundering provisions. In contrast, decentralized exchanges and aggregators such as 1inch often only require a wallet address.
Sergey Maslennikov, head of communications at 1inch, said:
“The 1inch Network is in the process of collecting the Series B funding round that has now grown to $175M (instead of $70M as was planned before). A significant part of these funds will be used for the development and launch of the 1inch Pro product which is specifically designed for the US market and for global institutional investors in accordance with all the regulatory requirements”.
1inch is the largest DEX liquidity aggregator with a total of 820 thousand users. As of September, more than $7bn worth of transactions have been executed on the platform, while at its peak in May 2021, the figure reached $9.8bn.
A DEX aggregator is used to get the best exchange rate when you want to swap one crypto for another.
Basically, 1inch analyzes several decentralized exchanges and other sources of liquidity. When a user wants to make a swap, 1inch redirects them to the DEX that offers the best exchange rate at that moment.
The company has also developed a token that serves both utility and protocol governance functions, allowing stakers to vote and receive rewards.
At the time of publication, the value of the 1INCH token is $2.59 with a market cap of $468 billion.
