DEX with KYC?

[ZionRTZ]

I recently encountered a Korean DEX that requires KYC even before you can start trading.
I also heard about IDEX planning to implement a KYC before but I'm not sure if it was implemented (please update me on this).

My knowledge on DEX is that they do not require any personal information from its user. You only need to connect your wallet thru metamask or other ways then you should be ready to go. Examples of these are Etherdelta, Forkdelta, and DDEX.

Now my question is, can we really consider those who require personal information from traders a DEX?

[MVT$]

I am unaware that a DEX would even require KYC. If there's such a DEX, it's probably a misrepresentation. I would call them a hybrid exchange instead of DEX.

[dragononcrypto]

 I think the issue is very few of these DEX's are pure DEX's, as people say time and time again.

They nearly all rely on centralized servers, and therefore the company behind these websites are liable for having KYC for their customers, as they are responsible for hosting a trading platform. This is how Etherdelta founder was charged by the SEC. Not forgetting that many of these DEX's, including IDEX and soon Binance, require depositing into the exchange smart contract in order trade, again, this is not truly decentralized. The owners of that smart contract yet again become liable, due to gaining profit from having a trading platform in the form of a smart contract. Even as an ERC20 contract on Ethereum that is decentralized, it's not relevant.

The only exception is to have "pure software" DEX, whereby there is no server because the trading is peer-to-peer, as opposed to peer-to-server-to-peer and peer-to-contract-to-peer, which is completely different (in the eyes of the law as well as the SEC). But even new projects such as Resistance, despite being pure software and peer-to-peer DEX, will still be requiring KYC for their software customers, due to the profit gained from the associated Resistance Coin (and it's centralized ICO). Even if the KYC apparently won't be linked to any associated accounts or wallet, they still are required to have it. This should tell you a lot here!

To have a "realized" pure DEX, it would require a project to not have an ICO'd coin, server or contract to make money from, as a pure open-source project, nothing else.... I think Bisq is the only example (unless I'm mistaken), but nobody really uses it, probably due to lack of marketing as well as funding. It's a sad reality that hopefully one day will change, but until then, the best options in the future will likely be the software based DEX's that are yet to implement KYC, before they do so, or potentially the decentralized KYC approach that Resistance is taking on.

To summarize, the question of decentralized exchanges is complex and still not completely clear, but that ultimately 99% of these DEX's will require KYC because they are simply not 100% decentralized. If it involves a sever, a contract or a ICO'd coin - there is centralization involved and therefore financial liability.

[ZionRTZ]

With that, I guess all we can do for now is to wait for a proper definition of a centralized and decentralized exchange.