OKX CEO, Star Xu, recently issued a warning to users about the risks associated with interacting with the sanctioned crypto mixer, Tornado Cash. He emphasized that deposits from sanctioned entities such as Garantex and Tornado Cash, or withdrawals to these entities, could trigger compliance risks and ultimately lead to account suspension. Xu reiterated that OKX strictly adheres to all relevant sanctions policies, particularly those from the US, and does not onboard customers from the Specially Designated Nationals (SDN) List.
The warning from OKX comes in response to a public appeal by an X user called Satoshi Friends, urging exchange users from Commonwealth of Independent States (CIS) countries to withdraw their funds from the platform. According to Satoshi Friends, OKX has implemented strict policies that have resulted in sudden account blocks, fund freezes, and asset losses for users. This has had a significant impact on influencers, many of whom had their accounts blocked and funds restricted. Resolutions to these issues were reportedly only achieved after direct engagement with the OKX team.
Following a report from the Federal Reserve Bank of New York assessing the impact of US sanctions on Tornado Cash, OKX issued its warning. The report revealed that the sanctions had a notable effect on the usage of the crypto mixer. Larger pools on the platform have yet to fully recover to pre-sanction levels, while smaller pools have shown some signs of recovery. This suggests that there is still interest from retail users in using Tornado Cash despite the sanctions.
Tornado Cash, founded in 2019 by Russian nationals Roman Semenov and Roman Storm, came under scrutiny in 2022 when the US Department of Treasury sanctioned the platform. The sanctions were imposed due to Tornado Cash’s involvement in laundering over $7 billion in illicit funds from malicious actors, including the North Korea-backed Lazarus Group.
The warning from OKX CEO Star Xu regarding the risks associated with Tornado Cash serves as a reminder to users to exercise caution when interacting with sanctioned entities. Compliance with relevant sanctions policies is essential to avoid potential account suspension and fund freezes. As the regulatory landscape continues to evolve, users must stay informed and make responsible choices when engaging with cryptocurrency platforms like Tornado Cash.
Leave a Reply