Geofenced DeFi Yields: Why Workarounds Put the Risk on You

Added: 2026-06-08

[00:00:00]If assets like XRP are global, does US regulation really matter, or can we still earn yield through platforms in other countries?

[00:00:06]>> If you are a US resident, you are under US law. Now, can use a VPN and go outside of that and broadcast your IP address to the Netherlands or Ukraine or somewhere else and then participate in other DeFi protocols? Sure. You are opening those protocols up to lawsuits by the SEC. Because you are a US citizen, there are certain disclosures and requirements for securities that are required to be able to offer those products and solutions to you. Whether you agree with that or not, I'm not here to debate that. I'm just talking about the actual laws that exist. You're actually compromising their ability to provide those things. If enough people from the US are doing that and it's found out by the SEC and they are allowing those people to participate on their platform and not removing them, it would open them up to a lawsuit by the SEC for non-disclosure and other issues.

[00:00:55]That's why we've taken the position that, you know, DeFi products and ways to generate returns on these assets are securities, which is again kind of what was stated there in the joint statement by the CFTC and the SEC. The underlying assets themselves, not securities, they're commodities. But any contracts that stipulate that somebody else is going to be paying you returns based on their efforts and you putting up the capital or the asset, that meets all the prongs of the Howey test and it is a security. So, you know, if you're participating in Flare, if you're participating in Doppler Finance, if you're participating in Midas over there on Axelar, they have geofenced the US.

[00:01:30]I've talked to all of them. You're not supposed to be doing that and you are opening them up to potential lawsuits by the SEC. So, please don't do that. I know a lot of people that are and again, they can't really stop you because they can geofence IP addresses from the US, but they can't geofence VPNs if you're going to broadcast that somewhere else.

[00:01:48]So, you know, I would hope that you would want the disclosures and understand the risk associated with stuff. I do think that all of that will be rolled out here in the US and you'll have the capability to participate in those things. But if you are a US citizen, you are subject to the SEC's purview and protections.