Why dYdX Blocks Certain Countries Even as a Decentralized Exchange

Posted By Tristan Valehart    On 7 May 2025    Comments (19)

Why dYdX Blocks Certain Countries Even as a Decentralized Exchange

dYdX Country Access Checker

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Enter your country or region to see if you're currently allowed to trade on dYdX.

Currently Restricted Jurisdictions

Region Restricted Countries / Territories
North America United States, Canada
Europe United Kingdom, Crimea, Donetsk, Luhansk
Middle East & North Africa Iran, Iraq, Libya, Sudan, Yemen
Africa Congo (DRC), Mali, Somalia, Zimbabwe
Asia North Korea, Syria, Myanmar (Burma)
Caribbean & Central America Cuba, Nicaragua

Note: This list reflects restrictions as of October 2025. Restrictions may change due to new sanctions or legal updates.

When you hear about dYdX is a crypto‑derivatives platform that markets itself as a decentralized exchange, the first question is whether you can trade from anywhere in the world. The short answer: no. The platform enforces a long list of blocked regions even though its core trading engine lives on‑chain. Below you’ll find the real reason behind those blocks, the full list of restricted territories, and what happens to a wallet that trips the compliance filter.

Key Takeaways

  • dYdX limits access for users in the U.S., U.K., Canada and over 30 other jurisdictions.
  • Restrictions are enforced by dYdX Operations Services Ltd. through front‑end geo‑blocking and a “close‑only” mode.
  • Even though trade settlement is on‑chain, the centralized front‑end lets regulators shut you out.
  • If you are placed in close‑only mode for seven days, your wallet becomes fully dYdX country restrictions blocked.
  • Always check the latest terms-restricted lists can change with new sanctions.

How dYdX Promises Decentralization

The platform was founded in 2017 by Antonio Juliano is a Princeton CS graduate and former Coinbase engineer. Juliano’s vision was a trust‑less protocol where anyone could open perpetual swaps without a middle‑man. Under the hood, dYdX uses smart contracts on Ethereum, Layer‑2 solutions and the DYDX token (the native utility token) to settle trades, settle funding rates and distribute governance power.

In theory, that architecture means anyone with a compatible wallet can trade, regardless of geography. In practice, the user experience is mediated by a web front‑end (dydx.trade) that lives on a corporate stack.

The Centralized Layer That Enforces Borders

All front‑end requests pass through dYdX Operations Services Ltd. (DOS), a subsidiary that runs the UI, APIs and KYC/AML screening. DOS can read a user’s IP address, tap into geo‑IP databases, and flag wallets that originate from restricted zones.

When a flag is raised, the platform instantly flips the wallet into “close‑only mode”. While in this mode you can:

  • Cancel existing orders.
  • Reduce or fully close open positions via reduce‑only orders.
  • Withdraw funds that are already on‑chain.
You cannot:
  • Deposit new collateral.
  • Open fresh positions.
  • Transfer assets between sub‑accounts.
If you stay in close‑only mode for seven straight days, DOS upgrades the status to “Blocked”. A blocked wallet loses access to trade history, sub‑accounts and any UI‑driven withdrawal, leaving only the secret recovery phrase to rescue funds.

Why the Platform Needs to Block Countries

The restrictions are not a technical limitation; they are a compliance decision. dYdX must obey:

  • The U.S. Department of the Treasury sanctions programs (including OFAC).
  • The Office of Foreign Assets Control (OFAC) list of prohibited persons and entities.
  • Anti‑Money‑Laundering (AML) and Counter‑Terrorism Financing (CTF) rules that apply to any entity with a U.S. presence.

Because dYdX Trading Inc. is incorporated in New York and the dYdX Foundation operates out of Zug, Switzerland, the platform is subject to both U.S. and EU regulatory regimes. Ignoring a sanction could expose the company to hefty fines, asset freezes, or even criminal prosecution.

Full List of Restricted Jurisdictions (as of Oct2025)

Full List of Restricted Jurisdictions (as of Oct2025)

Current dYdX Restricted Countries and Regions
Region Specific Countries / Territories
North America United States, Canada
Europe United Kingdom, Crimea, Donetsk, Luhansk
Middle East & North Africa Iran, Iraq, Libya, Sudan, Yemen
Africa Congo (DRC), Mali, Somalia, Zimbabwe
Asia North Korea, Syria, Myanmar (Burma)
Caribbean & Central America Cuba, Nicaragua

The list is not static; new sanctions or changes in local law can add or remove entries. dYdX updates its Terms of Service quarterly.

Countries That Remain Accessible - A Curious Exception

Surprisingly, dYdX still allows users from China, Russia, South Korea, Japan and Vietnam. Those markets are not on any U.S. sanctions list, so the platform can legally keep them open while still blocking the countries above. This “selective compliance” shows the company is following the letter of the law rather than a blanket risk‑averse policy.

Practical Checklist for Prospective Traders

  • Confirm your residency is not on the restricted list before signing up.
  • Use a VPN only for privacy; it will *not* bypass DOS geo‑blocking and may trigger compliance alerts.
  • Keep your wallet’s secret recovery phrase safe - it’s the only way out if you ever get blocked.
  • Monitor dYdX’s Terms of Service page for updates; changes can happen with as little as 30‑day notice.
  • If you are placed in close‑only mode, liquidate positions quickly to avoid forced closures.

What Happens If You’re Blocked

Once a wallet reaches the “Blocked” status, the UI stops working. The only remaining function is the export of the Secret Recovery Phrase (SRP). With the SRP you can import the wallet into any other DeFi app, withdraw assets from the chain directly, or move them to a hardware wallet. Remember, the on‑chain positions are still yours; only the dYdX front‑end refuses to forward new transaction requests.

Because the underlying smart contracts are open source, a technically savvy user could interact with them via a tool like Etherscan or a custom script. However, that requires building and signing raw transactions, a step most retail traders are unwilling to take.

Future Outlook - Will dYdX Go Fully Decentralized?

There is ongoing community debate. The dYdX Foundation (the Swiss entity that issued the DYDX token) has pledged to migrate more governance to token holders. If the front‑end becomes truly permissionless, the geographic bans would evaporate. Until then, the hybrid model-on‑chain core + corporate UI-will keep the platform tethered to traditional regulation.

For now, the safest bet is to treat dYdX as a regulated service that offers decentralized execution, not as a purely permissionless protocol.

Frequently Asked Questions

Frequently Asked Questions

Can I use a VPN to access dYdX from a restricted country?

No. dYdX checks the IP address at the front‑end level and flags the wallet regardless of VPN use. Using a VPN may actually trigger the compliance alert faster.

Is the “close‑only mode” reversible?

If you move out of the restricted jurisdiction (e.g., travel to an allowed country) and the IP check no longer flags you, the wallet can return to normal trading after a manual review. Otherwise, the status stays until the seven‑day block converts it to “Blocked”.

What assets can I withdraw after being blocked?

All on‑chain assets you hold (DYDX, ETH, BTC, etc.) are still yours. You can export the SRP, import the wallet into another DeFi app, and withdraw via a direct contract call.

Why does dYdX allow users from China but not the United States?

U.S. sanctions and AML rules specifically target U.S. persons and many of the listed countries. China is not on the OFAC sanction list, so the platform can legally serve Chinese residents while still complying with U.S. law.

Will dYdX’s restrictions change if the U.S. lifts sanctions on a country?

Yes. The restricted list is tied to official sanction regimes. When a country is removed from OFAC’s list, dYdX typically updates its Terms within a month to reflect the new status.