The leading decentralized exchange on the Solana (SOL) blockchain, Orca, will prohibit users from the United States from trading coins on its front-end website effective March 31.
On March 16, 2023, Orca announced via its official website that it was adding the United States to the regions and nations barred from trading. The reason for the move wasn’t stated in the notice. Crypto.news’ request for a response from the co-founder of Orca Grace Kwan was not promptly answered.
Although the platform plans to enforce the new policy, it explained that traders who directly use Orca’s smart contracts, the system that carries out token swaps on-chain, won’t be impacted by the change in regulations.
Since a large portion of Orca’s order flow originates from Jupiter, a trade aggregator that connects to Orca’s back end, this could relieve the pressure on trading volume.
According to DefiLlama, Orca had a trading volume of $282 million over the last week. It was almost three times as much trade as there was on Raydium, the second-most popular decentralized financial trading platform on Solana.
Per recent market trends, unregulated centralized cryptocurrency exchanges in the United States frequently impose consumer restrictions to evade regulatory scrutiny. The US is known to ‘notoriously’ impose sanctions and charge such organizations and platforms heavily. Orca likely tried to avoid prosecution by taking these steps.
Solana network faces ongoing chain split challenges
According to validator Stakewiz, the Solana network is facing a severe chain split, although the reason is unknown. He said that it might not be possible to transact on Solana.
Although Solana portrays itself as a high-performance blockchain, it’s suffered multiple crashes in the past year. It was offline for about 18 hours in September 2022.
It also experienced a seven-hour period of freezing early in May last year before the validator restarted and four hours of downtime in June. Performance on the network declined in January, March, April, and May. As such, its increasingly worrying downtime suggests that Solana still needs to do a lot to improve its infrastructure.