Due to regulatory uncertainty in the US, crypto founders are increasingly considering geofencing as a compliance strategy. Jake Chervinsky, chief legal officer at Variant Fund, noted in a September 30th post on the X platform that many crypto founders are considering using this method. Geofencing refers to the virtual “fence” that blocks access to users in a specific geographic area. This method can be used as a compliance strategy by blocking users in countries with strict compliance requirements, such as the US.

In 2023, 17 jurisdictions representing 70% of global crypto exposure tightened crypto regulations. For example, DeFi protocol Sky shut down VPN access to block US users. Binance and Ethereum retaking protocol Eigenlayer similarly blocked US users.

Chervinsky said geofencing is an excessive and costly measure. However, compliance solution providers like GeoComply argue that using advanced geolocation data can help crypto firms expand into new markets with compliance.

Do you think geofencing is a sustainable solution for crypto firms? Share your thoughts in the comments.