Exchanges are proactively blocking US customers from being able to trade coins that had ICOs. This is a preemptive move to protect themselves from unclear US regulations.

Specifically, coins that are being blocked (AKA geoblocked” / “geothrottled” / “geofenced” ) are coins that had ICOs from July 2017. And specifically, these are being blocked in the US only as a safe harbor (meaning that some coins being block probably aren’t at risk, but exchanges are doing it to be extra safe).

Coinbase being geoblocked include likely include the following (the list below is specific to Bittrex, but it is likely other exchanges will mostly follow Bittrex’s lead):

ADT CMCT GO MFT QRL XEL
AMP DNT GTO MOBI QTUM XNK
BAY DTA HYDRO NLC2 RFR
BCPT ENG IHT NMR STORJ
BLOCK FCT ION PRO STORM
BOXX FLDC LBA PTOY SWT
ADX CVC INCNT NGC PMA SPC
AID DCT IOP NXT POT SRN
ANT DMT LRC OCN POWR UP
BFT EDG MCO OMG RCN UPP
BKX GNO MET PAL RLC VEE
BLT GUP MLN PART RVR VIB
BNT HMQ MOC PAY SNT WINGS

Here is the good news, bad news, and some facts on the geoblocks.

  • If you look at the coins getting geoblocked by Bittrex, and that are geoblocked by Coinbase, you’ll have a good sense of which ones will be blocked by other exchanges like Binance.
  • You can still use exchanges that haven’t geoblocked for now (Huobi Global and KuCoin for example), but the chances are that more exchanges that want to uphold their reputations will start geoblocking US customers soon.
  • All of the major exchanges either have been doing this, or are doing this. So Binance, Bittrex, and Coinbase included. That helps protect these exchanges from potential lawsuits down the road.
  • Almost every coin that is getting geoblocked is an ICO done on the Ethereum network. This is actually a good thing in that Ethereum makes direct trading rather easy on the network via DEXs. Since all these coins will still trade on foreign markets, people “stuck” in alts being geoblocked can in theory HODL and still find ways to sell their coins down the road. Clearly the risk has gone up for everyone in terms of price, but Ethereum makes things flexible (the same qualities that make it useful for crowdfunding essentially make it useful for trading coins direct from an Ethereum wallet too).
  • IMPORTANTLY, any of these could be re-listed in the future if the SEC or congress decides to offer more clarity. Right now the SEC is just slowly suing specific projects like EtherDelta and KIN, and it is to that exchanges are reacting. However, if the SEC gave out very clear guidelines, or if congress stepped in and offered clear guidance, then some coins could come back.

The bottom line is however, US investors are having increasingly fewer options for alts that had ICOs. You can still keep your tokens on exchanges in most cases, and in the case of nearly every coin you can move it to an Ethereum wallet (where you can hold it or trade it on DEXs), but yeah…. ouch, should have seen this coming, but ouch.

NOTE: Below is a useful Twitter post from “Goomba” about which coins you can still trade on which exchanges. The list is useful, but a little misleading as the Goomba incorrectly noted Bittrex as trading some which it actually geoblocked in the first place (like BTT for example; it never blocked it, because it has never been tradable in the US).

A list of Coins being blocked (please note some of these Bittrex ones are also blocked).

TIP: Most of what you need to know about the SEC can be read in between the lines from the SEC’s Jay Clayton via the SEC public statement “Statement on Cryptocurrencies and Initial Coin Offerings.” Specifically, if an ICO boasted about gains on a secondary market, didn’t have a working product built, and launched after the SEC gave out warnings in mid-to-late 2017 (pretty specifically when they sent out the July 25, 2017 “Investor Bulletin: Initial Coin Offerings“), they are likely getting geoblocked.

On July 25, 2017, the SEC issued a Report of Investigation under Section 21(a) of the Securities Exchange Act of 1934 describing an SEC investigation of The DAO, a virtual organization, and its use of distributed ledger or blockchain technology to facilitate the offer and sale of DAO Tokens to raise capital. The Commission applied existing U.S. federal securities laws to this new paradigm, determining that DAO Tokens were securities.  The Commission stressed that those who offer and sell securities in the U.S. are required to comply with federal securities laws, regardless of whether those securities are purchased with virtual currencies or distributed with blockchain technology.

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