Topic: What if DEXs are banned in the future? - page 3. (Read 492 times)

maybe the DEX system will switch to like CEX. if they want to survive with their business and not lose customers, of course, they have to adapt to government regulations.
This is indeed unpleasant, but what we fear may also happen in the future.
if there was a problem that entangled an entire centralized exchange, it would certainly annoy most users. if exchanges stick with what they are doing, still users will probably switch and leave CEX.

I just can’t imagine that and it looks almost impossible to happen now, so I can think much of a way out if they are completely banned in the future. We know that the DEXs are a big deal on the government’s side and they’ve been devising means that they can clamp it down and have it operate like how CEXs does now. The government can’t be underrated and they can do whatsoever they wish, some just have to take time before it’s finally achievable. I am no scared of them being banned in the future even though I know it won’t be a nice thing to the crypto community, in spite of all this, I know bitcoin will still prevails.

If you really want to know, I'd suggest you read the following articles:

https://news.bitcoin.com/uniswap-censors-253-crypto-addresses-blacklisted-for-crime-sanction-associations/

https://thedefiant.io/decentralized-or-not-uniswap

From censoring addresses to hiding tokens, Uniswap fails to be a truly-decentralized and censorship-resistant exchange for the unbanked. I know the censorship case was related to sanctioned addresses by the US government. But what makes you think they won't do the same with an average person in the future? If some government flags you as a "terrorist" or a criminal, you will be unable to swap your tokens on Uniswap.

I believe Web 3.0 should be neutral for true decentralization + censorship-resistance. Unfortunately, there's only a small number exchanges that adhere to crypto's original principles. Regulatory pressure is increasing each day, so I wouldn't be surprised if DEXs are banned in the future.

I’d appreciate if you explain what you mean about you not calling Uniswap a decentralized exchange. I don’t understand how you mean that they are prone to censorship.


Unfortunately in this context, everyone doesn’t think the same. Satoshi did his part and created what the world was lacking, we’ve seen different cryptocurrencies that are the exact opposite and work against his purpose of creating Bitcoin. I wouldn’t be surprised if I saw switch DEX too, it will be so ironic.

Blacklisting address, eh? So much for censorship-resistance. I wouldn't call Uniswap a "decentralized exchange", especially when it's prone to censorship. Not only that, but the source code of the project is limited (open source after a few years of each iteration). I miss the old days when we had truly-decentralized exchanges such as EtherDelta and ForkDelta. Ever since Uniswap came into fold, things haven't been the same. Even though there's still a small number of truly-decentralized exchanges, the market is largely dominated by both semi-centralized and centralized players. This is harmful for the crypto industry in the long run. It'll be extremely-easy to enforce regulations at will.

If only developers stopped thinking the money and started caring about decentralization/censorship-resistance, crypto would've achieved its full potential by now. Wasn't the whole point of Bitcoin to eliminate the middleman? I wouldn't be surprised if KYC-compliant "DEXs" emerge in the long run. Most people won't care about giving away their personal info as long as they get convenience in return. It will be a dark future for crypto/Blockchain tech, unfortunately. 

No doubt government has been a great threat to crypto currencies just as you said. from baning of mixers and enforcing people on kyc but i dont think its possible to enforce a law that will affect Dex. Because Dex is DEX while CEX is CEX. Decentralized exchange (DEX) is an exchange of crypto that store and send coin from wallet to wallets while Centralised exchange (Cex) is an exchange that store and trade crypto currencies through p2p with the use of kyc. And for one to trade your coin for Fiat you would definately used a Centralized exchange for p2p. So since it's almost useless to fight the impossible i think it's only CEX they will target. Because whomsoever that did money laundering with DEX will definitely need CEX for Fiat exchange. That is why they can only attack CEX.

Nothing will happen if Dex is ban. There is no way both of them DEX and CEX will have issues at a time. In as much as government is kicking against crypto currency, I think they too also invest behind Close doors and act as if they don invest publicly. But one thing you should understand is that what ever have an advantage also have a disadvantage. So baning DEX will also affect those government entities that did money laundering and invested in crypto. thereby they will see it as needles to do such because they are also a pertner In crime. That is how I see it in my own way.

What kind of law will it be that you asked DEX to get user KYC? I am on the fence for this conversation because I understand both parties… the government wants to know what’s going on, who is transacting the money, etc because people launder money. The decentralized system wants to give and respect user anonymity. So, what the government wants is understandable but making such law will just mess up crypto (to an extent).

It might go so far, as it seems most dexes are in core very centralized, but more plausible scenario is that they need to blacklist addresses to stay alive. Uniswap has done this and i am guessing other relevant DeXes are required to do this also.

I am guessing that some dexes will just get more automated and decentralized enough that they can't be shut down. This would leave most of the AML law responsibility to centralized financial services that are required to freeze money from blacklisted accounts or money from mixers etc.

Bitcoin can be legal in some countries and not all because most of these countries have perceived bitcoin to be the only threat that will drive away their good chances.nThe government is powerful and authorized to permit any project they pleases. The government will poses threats and ban on this modern day projects because they found most of them to become threating to their own revenue and development, none of these citizens still fancy the day-to-day activities of the government, rather they will look for another means to check the possibility of scouting out another means to triggered their activities without the knowledge of the government.

Bitcoin is illegal in many regions of the world so how do people from those region make investments in bitcoin? If government ban dex then people will not be able to use them legally and some people will not use them to avoid any trouble but most of the users will try to look for any alternative way to go over the system. Government can pass laws but if they are against the demands of the community, then people will figure out their own way to bypass the law so that they can still use the product if they benefit from it.

You are absolutely right that it is very challenging for governments to ban DEXs because they have no centralized authority to control their operations. It is worth noting that they are not immune to government regulatory or legal action, however, It will be difficult for government to ban DEXs as they operate on open source block chain technology, and cryptocurrencies can be traded peer to peer even in the absence of formalized trading platforms.

Most DEXs aren't truly-decentralized, so it's easy enough to shut them down if they don't comply with KYC/AML laws. Developers tied to semi-decentralized exchanges will have no choice but to integrate KYC to avoid prosecution from the government. Only a small minority of DEXs (those that are truly-decentralized) would be completely "impenetrable". If they are made "illegal", DEX liquidity will decline at a very fast pace. That's because most people will avoid them out of fear from the government.

At least we know DEXs won't be going anywhere thanks to their open source nature. What stopping anyone from creating a fork anonymously? Trades will happen under the radar of mainstream governments. As long as there's one truly-decentralized exchange alive, we should have nothing to worry about.

As people have already explained, it would be difficult to block DEX. They can ban the IPs and domains but there could be many of those proxies. Another serious way of stopping it would be the criminalizing of using of DEX and arresting people for using it. That would certainly stop most people.
If initiated and promoted by the US, they could implement on most of the world. I don't think that's a likely scenario but you never know considering how low the authorities can go for holding on to their power.

I can confidently claim that there is no such thing as a single point of control in a DEX. How do you think anyone, even someone as powerful as the government, can control, ban or regulate that? The decentralized nature of these exchanges makes them technically impossible to be banned.

So do I think that any DEX is going to be banned in the future? No. It is extremely unlikely. And the only reason why I say unlikely is because I do not know what kind of technology the future will bring us. We might live in a dystopian future, in a world where everyone is monitored all the time. That might break decentralized technology.

However there do exists exchanges which claim to be DEX but are not. Those can be banned.

Decentralized exchanges will eventually be banned by all governments. We have started seeing this actions from the United States and slowly other allies of US will start following the same. So there is no question whether the decentralized exchanges will be banned or not. We need to consider that it will be banned and all crypto users will have to follow usual KYC guidelines for using centralised exchanges.

I think it is better to be mentally prepared for the inevitable. Because I do not see governments allowing unidentified transactions in cryptocurrency ever in the future. They have slowly started implementing it and the ban on crypto mixers is just the beginning of it.

It's possible with the current build of most "decentralized" exchanges but it will probably become more resource intensive for the Government to implement such policies. They may want to just focus on the various centralized fiat-payment gateways to combat anti-money laundering since it's where most cryptocurrencies end up anyway.

The struggle between regulators and decentralized exchanges (DEX) is very tricky, but the end is not coming soon, the situation should not change next year. This complex process of prohibition will be accompanied by small attempts by the government to change the legal framework. The lack of a central authority or server makes it difficult for governments to shut them down completely.

Why do you think the government would try to ban a DEX, they have tried to ban crypto trading earlier, and the result was not what the government expected. Recently Nigeria has come out of the crypto ban and in the past India went through the same phase.

Why is it impossible to ban a DEX? The simple reason being they as in the DEX are not available in the real world. An outright ban is not possible because DEX does not have a central entity or a target server. To shut them down a government would need to shut the internet, it can only happen in a country where democracy does not exist.

I don't think that any government can come up with a ban on DEX, what I understand is that they might come up with regulations. That being said they might force individual wallet holders to pass KYC using the data that these DEX hold. They might force a DEX to strictly follow their regulations. I do not know how they would do it but I am certain it is not that easy to ban them.

Various privacy-enabled DEXs are possible. Government won't know what citizens do with crypto while there's the right to remain silent.

The worry is that governments don't like DEX in anyway because they don't control it, something in their domain that concerns finance and there's no how that they can monitor the currency flow. Looking from the governments perspectives I think that it can be for security reasons that can make them to consider ban of DEX, probably money laundering for illegal activities in respective countries.

If DEX ban is achieved then the purpose of privacy in Bitcoin will be defeated, it'll no longer be anonymous like Satoshi Nakamoto, envisioned, it'll end up just like another currency in digital form. I sincerely hope that this does not happen because decentralization is the core of Bitcoin, without it the privacy that it's holders enjoy will be lost.