OKX CEO Star Xu has declared a strict policy against accounts interacting with Tornado Cash. Effective immediately, any OKX account found engaging with the controversial decentralized mixing service will face termination, as per a statement released by the crypto exchange.
Tornado Cash Controversy
Tornado Cash has gained fame for its ability to obscure cryptocurrency transactions, a feature popular among privacy advocates but also exploited by malicious actors to launder stolen funds.
New Compliance Measures
Xu emphasized that OKX’s risk control systems are now set to automatically detect and terminate accounts involved with Tornado Cash or other sanctioned entities, such as Garantex. “We are required to comply with applicable sanctions policies, including US sanctions,” Xu affirmed.
The announcement follows a public warning by a user known as Satoshi Friends. The user, representing a community in the Commonwealth of Independent States (CIS), urged users to withdraw their funds and discontinue the use of OKX. The user’s grievances included sudden account freezes and fund losses, which they claimed were linked to OKX’s rigorous compliance policies.
OKX’s Response to User Concerns
In response, Xu acknowledged that the user had previously engaged in significant transactions with sanctioned exchanges or DeFi protocols. Despite this, the user was permitted to withdraw clean funds before their account was blocked.
Xu explained that transferring data from an old account to a new one was not possible due to compliance issues, emphasizing that OKX cannot offer services to sanctioned persons or entities.
Xu reassured the broader user base that most customers are unlikely to be affected, as they operate far from sanctioned entities. He highlighted that these measures are crucial for maintaining the exchange’s commitment to regulatory compliance and financial integrity.
Impact on Tornado Cash
This crackdown on Tornado Cash comes amid reports of the service being used to launder stolen funds from recent protocol hacks. For instance, on August 7, the hacker behind the Rain crypto exchange breach began laundering 1,155 Ether through Tornado Cash.
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