October 24, 2023 at 16:18 GMTModified date: October 24, 2023 at 16:18 GMT
October 24, 2023 at 16:18 GMT

Largest Solana protocol has blocked UK users

Leading Solana protocol Marinade Finance is blocking users based in the UK from accessing its services. 

UK. Pic: Unsplash

Leading Solana protocol Marinade Finance is blocking users based in the UK from accessing its services. 

When trying to access the site, UK users received a message upon stating: “Access to this site is unavailable in the United Kingdom due to compliance concerns relating to rules and regulations promulgated by the U.K. Finance [sic] Conduct Authority. Users may withdraw liquidity, claim delayed tickets, or delay unstake via our SDK.”

This approach by Marinade Finance marks a notable divergence in the decentralised finance (DeFi) sector, known for its decentralised approach and general resistance to imposing geo-restrictions. Most DeFi protocols do not implement know-your-customer (KYC) checks, allowing them to operate without directly considering local regulatory frameworks.

Solana ecosystem faces regulatory pressure

Despite its significant presence in the DeFi ecosystem, Marinade Finance has remained silent about the move on its X (formerly Twitter) account.

With 75,000 users, the protocol is responsible for most of the total value locked (TVL) on the Solana blockchain. It has $262m spread across staking products, which is over 70% of the total amount of assets across the entire Solana blockchain, according to DefiLlama.

Orca Finance, the largest decentralised exchange on Solana, has also enforced similar access restrictions for UK users. Those trying to access the website are met with the same message. 

These actions seem to be in response to the Financial Conduct Authority (FCA)’s latest regulations, which put limitations on promoting crypto-related products and services in the UK.

The FCA’s new Financial Promotions Regime, introduced on 8 October, aims to standardise the advertising practices of crypto companies, making them more fair, clean, and transparent.

Several organisations, like OKX and MoonPay, have openly stated their intentions to comply with these new regulations.

But it has left others struggling to meet regulatory requirements and left with no option but to halt progress in the UK market.

Major platforms leave the UK market

This regulatory pressure has not only affected DeFi protocols but also more established centralised platforms. On 16 October, Binance, the world’s largest crypto exchange, announced it would stop onboarding new UK users, attributing the decision to issues with a local business partner’s certification. 

While Binance looks for a new PR partner, its future in the UK market is uncertain. The exchange has previously completely withdrawn from the Dutch and German markets after failing to meet regulatory requirements. 

Bybit has also restricted its services. It has stopped accepting new customers and has plans to automatically settle any remaining open positions for UK users by 8 January 2024.

PayPal similarly has ceased cryptocurrency transactions for UK customers

However, some companies are taking a different approach. Both OKX and Coinbase are actively seeking to align with the FCA’s standards by collaborating with authorized firms to help them navigate the regulatory process.