ApeCoin Geo-Blocks North American Users From Staking

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North Amer­i­can cryp­to users will be restrict­ed from stak­ing ApeCoin, the ERC-20 meta­verse token issued by Yuga Labs, accord­ing to a com­pa­ny state­ment on Wednesday.

The ApeCoin DAO claimed the “cur­rent reg­u­la­to­ry envi­ron­ment” left it with “no good alter­na­tive” but to selec­tive­ly geo-block the ser­vice in numer­ous areas, includ­ing Cana­da and the Unit­ed States.

Yuga Bends to Regulators

In its lat­est project update, ApeCoin offered details about the upcom­ing launch of ApeStake.io. The site goes live on Sep­tem­ber 5th, after which the asso­ci­at­ed smart con­tract will be fund­ed with­in two days. Stak­ers may begin accru­ing rewards one week after launch on Decem­ber 12th. 

How­ev­er, as detailed at the bot­tom of the page, stak­ing ApeCoin may prove far more dif­fi­cult for some users than oth­ers, depend­ing on their loca­tion. Coun­tries and regions includ­ing the Unit­ed States, Cana­da, Syr­ia, Iran, Cuba, Rus­sia, Crimea, Donet­sk, and Luhan­sk will all be geo-blocked from staking. 

“We are aware that geoblock­ing some users in North Amer­i­ca is incon­ve­nient for many mem­bers of the Apecoin com­mu­ni­ty,” said Yuga. “Unfor­tu­nate­ly, in today’s reg­u­la­to­ry envi­ron­ment, we had no good alternative.”

“Stak­ing” in cryp­to often refers to lock­ing up one’s cryp­tocur­ren­cy to secure a giv­en blockchain net­work, while being reward­ed with net­work fees and sub­si­dies. It may also refer to any ser­vice requir­ing some­one to lock up their dig­i­tal coins in return for peri­od­ic yield. 

Such a prod­uct puts ApeCoin in the crosshairs of U.S. secu­ri­ties reg­u­la­tors, who have been clamp­ing down on cryp­to lenders pro­vid­ing sim­i­lar ser­vices through­out the year. For exam­ple, a Cal­i­for­nia watch­dog ordered Nexo to stop offer­ing inter­est-bear­ing cryp­to accounts in Sep­tem­ber, deem­ing them unreg­is­tered securities. 

The Secu­ri­ties and Exchange Com­mis­sion (SEC) feels much the same: it stopped Coin­base from issu­ing a lend­ing prod­uct last year and has even sug­gest­ed that “proof of stake” based cryp­tocur­ren­cies could more close­ly resem­ble securities. 

The fed­er­al agency began inves­ti­gat­ing Yuga Labs for poten­tial­ly vio­lat­ing secu­ri­ties laws last month. It sus­pect­ed that cer­tain NFTs, as well as Apecoin, may resem­ble stocks or oth­er securities. 

A Potential Loophole?

While ApeCoin may pre­vent front-end access to its stak­ing site for cer­tain regions, the orga­ni­za­tion not­ed that smart con­tracts are tech­ni­cal­ly acces­si­ble by anyone. 

“We want to remind the com­mu­ni­ty that one of the ben­e­fits of decen­tral­ized finance is that any­body can inter­act with a smart con­tract, or devel­op clients and inter­faces that allow users to inter­act with smart con­tracts,” said ApeCoin over Twit­ter on Wednesday. 

ApeCoin added that third-par­ty com­pa­nies have already devel­oped alter­na­tive inter­faces for inter­act­ing with the con­tract, beyond the first-par­ty site. 

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