Some time ago, the US SEC held EtherDelta's founder accountable for the listing of unregistered securities on the platform. This was surprising considering that the exchange itself is decentralized living on a network outside the control of a single entity. Everything was governed by smart contracts on the Blockchain in a fully-autonomous manner. Yet, the government agency decided to prosecute the creator of the DEX itself. This could be a serious issue for other DEXs if governments decide to crackdown on the industry.
The real issue would be finding the creator of a DEX whose identity is anonymous on the Internet. It would be impossible to enforce regulations on decentralized exchanges this way. Once the government finds that its efforts are in vain, it could deem smart contract platforms such as Ethereum and Cardano "illegal".
What are the implications of regulating decentralized exchanges? Do you think it's possible to enforce regulations on them? Can DEXs remain decentralized enough to go above the law? Your input will be greatly appreciated. Thanks in advance.
Its impossible, that is why it is called decentralized since its not controlled by anyone and the creator can't be responsible because the projects are transacted using smart contracts of the respective networks. If SEC wants to regulate DEX then they should ban it completely which is also useless.The real issue would be finding the creator of a DEX whose identity is anonymous on the Internet. It would be impossible to enforce regulations on decentralized exchanges this way. Once the government finds that its efforts are in vain, it could deem smart contract platforms such as Ethereum and Cardano "illegal".
What are the implications of regulating decentralized exchanges? Do you think it's possible to enforce regulations on them? Can DEXs remain decentralized enough to go above the law? Your input will be greatly appreciated. Thanks in advance.