Regulation in crypto is coming. We can already see real-life situations develop. One of the latest samples occurred in the UK. Two big Solana Dapps blocked UK users. 

This happened because of “compliance concerns” over Financial Conduct Authority (FCA) regulations. It involved Marinade Finance and Orca Finance on Solana. So, let’s take a closer look at what actually happened.

But first, let’s take a look at what is a decentralized application (dApp)

What Is a Dapp?

A Dapp is short for Decentralized Application. The idea is, that once they’re deployed, they keep running. It’s nearly impossible to take them down. Dapps are typically distributed. As a result, there’s no central or single point of failure. That’s because various nodes store data of a Dapp among them. So, if one node fails, the other unaffected remaining nodes keep running the network. 

However, that’s the theory. The reality is that almost all Dapps are being controlled by a person or a company. So, a Dapp only stores small pieces of data and stores them on a blockchain. For example, the data relates to asset ownership. However, the company or the person who created the Dapp runs the rest of the Dapp.

Let’s take a look at a DEX (Decentralized Exchange). Yet, having the word decentralized in the name, doesn’t necessarily make it decentralized. Whether we like it or not, they also have centralized parts in them. For example, DEXes can use centralized servers. The following video shows how a Dapp works.

Or let’s take a look at NFTs. The token itself may be centralized. However, the company that made the NFT runs the marketplace, the data, or the image. Most NFT images are even stored off-chain, on centralized servers.

So, not everything that shines is gold. We found out a few reasons why Dapps are not decentralized yet. Because, if they were, they would be 100% censorship-resistant. That’s why we need to take a closer look at what happened in the UK. 

Marinade Finance Blocked Users in the UK

According to DeFiLlama, Marinade Finance currently has the highest TVL on Solana. Their TVL is almost $273 million, and Solana’s total TVL is $385 million. So, Marinade’s share is quintessential. Marinade automates staking on Solana. It also offers liquid staking options.  Their native staking annual yields are around 8.15%.

For liquid staking, you can get another 7.7%. They play very well into the successful ‘Only Possible on Solana’ campaign. Now, in the UK, their landing page has a warning message. It restricts UK users to,

  • Withdrawing liquidity.
  • Claim delayed tickets.
  • Delay unstaking via their SDK.

This is a direct result of changing crypto regulations in the UK. For example, the Financial Conduct Authority (FCA) has implemented new rules. These are guidelines that should regulate promotional campaigns of crypto-based products and services. The FCA is looking for transparency and ultimately wants to protect consumers.

However, somehow these new rules have backfired. Within the crypto community, many projects have re-evaluated their UK business strategies. This resulted in firms withdrawing their services from the UK crypto market. For instance, PayPal and Bybit have already exited the UK market. Another sample is Binance, they don’t accept new customers on their UK platform. 

Orca Finance

Orca Finance is another Solana-based project. It’s a DEX, and it ranks on spot #5 for Solana TVL. Its current TVL is $52 million. This platform geo-blocked UK users. It appears to be a response to the new FCA guidelines and rules. This brings us to geo restrictions and DeFi. Let’s take a closer look at this.

Geo-Blocking in DeFi

Geo-blocking in DeFi is rather rare. For instance, in general, DeFi doesn’t require KYC procedures. So, to see that Marinade Finance and Orca Finance did this in the UK is peculiar. It’s also another sample of why Dapps are not decentralized. 

Developers, or their teams, start doing this. So, does this mean that in the future, we all need VPN services, so we can use our fave Dapps? It almost looks like it. However, many DeFi Dapps won’t allow VPN on their platforms. Once they detect a VPN, you can’t access the Dapp. 

This can be useful to fight Sybil’s attempts by airdrop hunters. But unfortunately, we may see restricted access to various Dapps. All pending on where you live, of course. So, unfortunately, this is by no means decentralized.

On the other hand, we see many initiatives to get clear regulation on the table. Especially in Europe, we see governments and crypto projects working together.


Two Solana protocols recently blocked their UK users from using their platforms. Regulation in crypto is underway, and this is a real-life sample. Both platforms cited “compliance concerns” over Financial Conduct Authority (FCA) regulations.


The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.

We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

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