Pancakeswap Introduces Geoban For Users In Iran
Decentralized exchange Pancakeswap has plans to block users and Internet Protocol (IP) addresses originating out of Iran. Reports suggest that the Binance Smart Chain DEX will stop Iranian users from accessing its platforms from early March 2022.
Binance Smart Chain DEX Geoblocking Traders In Iran
According to a message posted by a Persian cryptocurrency community dubbed CrytpoClub, Pancakeswap, a major decentralized exchange (DEX) built on the Binance Smart Chain (BSC) Network, will soon ban Iranian users from accessing its platform.
The geoblocking move set to take effect on Wednesday, March 9, 2022, will also stop nine other territories from using the DEX. Countries included in the ban are Belarus, Cuba, The Democratic Republic of Congo, Iraq, North Korea, Sudan, Syria, Zimbabwe, and Crimea.
Since the news broke, some social media users have asked how it’s possible for decentralized crypto exchanges to block IP addresses from specific locations. One Twitter account with the username “arbed_out” provided insight and said:
“I imagine (though have no confirmation) that requests made to BSC’s centralized endpoints listed here: https://docs.binance.org/smart-chain/developer/rpc.html will be checked to see if a) the originating IP addresses are from Iran (according to MaxMind) and b) if the request is calling PancakeSwap.”
What this user is trying to highlight is that although Pancakeswap is designed to function as a DEX, the platform is built on the BSC network and is connected to centralized endpoints. These endpoints can be programmed to block requests from a particular jurisdiction, in this case, Iran.
Other commentators have suggested the use of Virtual Private Network (VPN) services to bypass the ban. However, digital asset service providers have become wary of such tools since the U.S. Treasury’s Office of Foreign Asset Control (OFAC) called for cryptocurrency companies to strictly monitor VPN usage on their platforms.
As at the time of writing this report, it remains unclear how the decision might affect Pancakeswap. The DEX currently accounts for over a third of total value locked (TVL) in the BSC ecosystem, according to data from decentralized finance (DeFi) aggregator DefiLama.
Crippling Crypto Censorship
The news comes as the latest development relating to crypto censorship measures implemented by platforms, protocols, and governments. Back in 2018, Binance informed traders in Iran to withdraw all remaining assets from its exchange.
In similar developments, the popular DEX aggregator 1inch blocked U.S. users from making transactions on its platform in September 2021 after coming under pressure from American regulators.
Following the announcement from 1inch, a Twitter user with the name “0xtuba” commented on a flaw present in hybrid on-chain/off-chain systems. According to the user, decentralized apps (DApps) that deploy on-chain settlement and off-chain computations will fail to build sufficient censorship resilience.
As previously reported by crypto.news, China restricted access to some major crypto-related tools and websites as part of its crackdown on digital currencies in the country. CoinGecko, CoinMarketCap and Trading view were among the platforms blocked by the Chinese government.
