RLC Token — State of the Exchanges
*2021 UPDATE**
iExec RLC tokens are now available for US citizens on Coinbase! And most other major exchanges!
🎉
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According to this announcement, after the 28th of June 2019, U.S. citizens will no longer be able to freely trade RLC tokens through Bittrex. This echoes changes made in the terms-of-use of Binance.com, announced here, restricting U.S. citizens and corporations from accessing the Binance platform after the 12th of September 2019.
You may have read about decentralized exchanges like Bancor DEX, Binance DEX or even IDEX announcing that they will start geoblocking U.S. users based on their IP.
As an RLC token holder, facing these announcements may leave you with some questions.
You may be wondering if these changes may affect you. And for iExec too, we would like to insist that the situation is one of our main priorities.
The RLC token was designed, from the ground up, to enable the exchange of cloud computing resources. iExec is making fast progress in the development of its decentralized marketplace, as demonstrated with the recent release of iExec V3 on May 15th, 2019. So in order to ease platform adoption, facilitating access to RLC liquidity is of the utmost importance for the project.
What the fuss is all about with the U.S?
Many countries around the world have already started to regulate crypto exchanges. Some countries, such as France, have adopted a very permissive approach with the PACTE bill, offering an optional visa for crypto-exchanges delivered by the French SEC (namely the AMF). Other countries like Japan impose much stricter rules on crypto-exchanges, allowing them to list only a minimal subset of crypto-assets, and requiring them to obtain a license from the Japan Financial Services Agency (JFSA).
Regulation is coming to the US and as it progresses, regulated entities — including exchanges — need to adapt and comply with the new rules.
In 2019, all exchanges dealing with U.S. customers will have to comply with the new regulatory framework communicated by The Financial Action Task Force (FATF), or expose themselves to severe fines and penalties.
Depending on the exchange, they may adopt slightly different strategies to comply with the new framework. In the case of centralized exchanges, Binance has decided to partner with a FinCEN-registered company to run its new exchange in the US. While Bittrex, already registered in the US, opted to migrate a specific list of tokens onto its “international” version of the platform. The RLC token is not an isolated case, as more than half the top 150 market cap ranking projects face a similar issue:
So what does all of this mean for a US citizen? Well, depending on the measures implemented by the exchanges, a holder may face one or more of the difficulties listed below:
- They may risk violating the platform’s ‘terms of use’.
- They may be geoblocked based on their IP.
- They may be refused account creation on KYC completion.
In order to help you navigate the ever-moving regulation field, we did a recap of all the exchanges offering an RLC pair, and the kind of restrictions targeting US citizens:
Now let’s go over the different ways to access RLC liquidity.
Decentralized exchanges
Non-custodial exchanges are gaining tremendous traction these days, showing steady growth in terms of volumes, and for a reason:
- No tedious KYC procedures.
- Instant access to hundreds of tokens.
- For whoever you are, wherever you are.
And they are a breath of fresh air to use. If you head over to Uniswap for instance, you’ll be surprised by how simple it is to buy/sell RLC, in contrast to centralized exchanges:
However, using a decentralized exchange differs in a few ways from their centralized counterpart:
- You are in control of your private keys, using whatever wallet provider you like (Metamask, Ledger, you name it…).
- You already own ETH, or any ERC20 token (Do you own BTC? You can swap it for ETH using liquality).
- You’d prefer not to liquidate a large position (>10,000$) in one single trade.
As time goes on, each of these requirements is being worked on so it becomes less and less obtrusive to the end user. iExec being a decentralized marketplace built on Ethereum, it feels natural that we integrate with and encourage the use of DEX (read about the recent RLC listing announcement on Kyberswap).
Centralized exchanges
That is still where most of the RLC volume is being traded today, but unlike decentralized exchanges, they need to play by the rules of the regulator. And talking about the US, financial regulators may be as numerous as the number of consensus types we have in the blockchain world: FATF, SEC, CFTC, FinCEN…just to name a few.
Adding to the confusion, they sometimes infringe on each other’s portion of the regulation spectrum. But if we had to summarize their main mission regarding crypto exchanges, that would be ensuring:
- There is proper KYC/AML,
- A reasonable balance between the investor profile and the risks he is exposed to,
- No financial securities 💣 💥 !
Until now, each jurisdiction under which we asked a law firm to state on the nature of the RLC token concluded that the RLC token is not a security, including in the US.
This leaves us optimistic about the ongoing work focused on finding the proper regulation path to maintain the RLC token available to US citizens. Stay tuned on this.
New listings?
This is a question that comes back on and off. New listings are expensive both for exchanges and for a project. Not necessarily for the associated listing fee, but mostly for the market support that needs to accompany such listing. Ensuring that there will be volume on a new exchange is crucial in order to make it successful for the users, the project and the exchange.
We think of new listings as a way to reach pools of new potential users for the platform, and some jurisdictions in the world are such that they make it troublesome for their citizens to access RLC on current exchanges. These regions are well identified and we are actively working on it (not limited to the US).
As a closing note for our users, although we never comment on the price of the RLC token, we wish that it correctly reflects the maturity of the iExec network. This is what tokenomics is about, and here is how it works for the RLC token:
If you hold RLC and you’d like to offer any feedback for the project, drop us a mail at: rlc@iex.ec — thank you!
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See below for more on the 7 main announcements from the iExec V3 release:
The iExec roadmap is ahead of schedule. iExec V4, the high-performance computing version with GPU support is coming much sooner than planned, released this year!
