Simple Summary

NOTWITHSTANDING that KWENTA DAO has already been utilizing documentation and opt out warnings requiring users to manually override denial screens to dissuade access to the protocol from United States based and OFAC sanctioned users;

KWENTA DAO now wishes to take further steps to limit the ability of United States citizens and permanent residents, as well as individuals in OFAC sanctioned countries, to utilize the protocol. This proposal aims to limit the ability of U.S.and OFAC sanctioned individuals or entities to use the Kwenta protocol to the furthest extent technically and operationally possible. Further, this proposal clarifies that the protocol shall not be used by any individuals or entities in the United States and OFAC sanctioned jurisdictions whatsoever. OFAC sanctioned jurisdictions include: citizens of Burma (Myanmar), Cuba, Iran, Sudan, Syria, the Western Balkans, Belarus, Côte d’Ivoire, Democratic Republic of the Congo, Iraq, Lebanon, Liberia, Libya, North Korea, Russia, certain sanctioned areas of Ukraine, Somalia, Venezuela, Yemen, or Zimbabwe, or if the User is otherwise listed as a Specially Designated National by the United States Office of Foreign Asset Control.

Abstract

Kwenta Core Contributors will work with Horizons and additional counsel to revise documentation, operations, and protocol technology and engineering to completely avoid the United States and OFAC sanctioned jurisdictions.

Motivation

The United States has become increasingly hostile to decentralized finance protocols. It has sought to exercise jurisdiction over protocols that have arguably merely nominal or negligible contacts with the United States in an effort to regulate the global crypto community and the entire Internet.

The view of the DAO is that the United States does not have jurisdiction over properly decentralized protocols such as KWENTA, which has limited U.S. contacts. However, given the aggressive efforts of various officers acting on behalf of the United States, who have begun an aggressive campaign against the development of next generation decentralized finance protocols, the DAO must now take steps to protect itself and the DAO community at large by shutting down any possible connection, no matter how tenuous, with the United States.

Specification

• CCs to update documentation per recommendations by above referenced legal counsel.

• CCs to implement technical methods to make best efforts to prohibit, frustrate and deter citizens and permanent residents of the United States and OFAC sanctioned jurisdictions from accessing the KWENTA protocol. This would include, e.g. geofencing and other available technologies that can be proactively implemented. A review of other DAOs will be conducted to determine best practices and an aggressive approach to meet or exceed those standards should be pursued.