As an experienced analyst with a keen eye for regulatory compliance and a deep understanding of the crypto market, I find Star Xu’s decision to terminate accounts interacting with Tornado Cash a prudent move. The decentralized mixing service has been a hot topic due to its dual nature of providing privacy to users while also being exploited by malicious actors for money laundering.
Immediately taking action, OKX’s CEO Star Xu has implemented a firm rule: OKX accounts discovered interacting with the contentious decentralized service Tornado Cash will be subject to termination.
Tornado Cash Controversy
Tornado Cash is well-known for its capability of concealing digital currency transactions, a trait appreciated by privacy enthusiasts yet misused by criminal elements to wash ill-gotten gains.
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.
Individuals subject to sanctions cannot successfully open an account on OKX.
— Star (@star_okx) August 9, 2024
The statement comes after a community member called Satoshi Friends issued a public advisory. This individual, who is part of a community within the Commonwealth of Independent States (CIS), advised users to pull out their funds and stop using OKX. The user expressed concerns about sudden account lockouts and lost funds, attributing these issues to OKX’s stringent compliance measures.
It’s crucial for all OKX exchange users to take note: There seems to be an urgent matter concerning OKX. As a partner of this platform since 2019, I have advocated for it, trusting in its integrity and stability. However, today, I must sadly disclose that there appears to be a shift in the exchange’s policy, which may pose a risk. Please exercise caution when using the OKX exchange moving forward.
— Satoshi Friends 🌱 (@slezisatoshi) August 8, 2024
OKX’s Response to User Concerns
Responding to the situation, Xu admitted that the user had earlier conducted substantial financial activities with entities under sanctions or Decentralized Finance platforms. However, prior to account suspension, the user was allowed to withdraw uncontaminated funds.
In simple terms, OKX’s CEO, Star, has stated that any OKX accounts engaging with Tornado Cash will be terminated. Users who deposit funds from sanctioned entities like Garantex and Tornado Cash into their OKX account, or withdraw funds from OKX to these sanctioned entities, should be aware that such actions may trigger risk management measures.
— Wu Blockchain (@WuBlockchain) August 9, 2024
Xu clarified that moving data from an existing account to a fresh one couldn’t be done because of regulatory concerns. He underscored that OKX is unable to cater to individuals or organizations under sanctions.
As a researcher in this field, I wish to alleviate any concerns within our user community. The majority of our customers should not experience disruption, as they transact business distant from the sanctioned entities. It’s essential for our exchange’s steadfast dedication to upholding regulatory compliance and financial honesty that we implement these measures.
Impact on Tornado Cash
The intensified action against Tornado Cash follows news that this platform has allegedly been utilized for washing ill-gotten cryptocurrency funds, such as those stolen during recent cyber attacks on protocols. For example, the hacker responsible for the August 7 breach of Rain crypto exchange started laundering 1,155 Ethers via Tornado Cash.
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2024-08-09 13:42