OKX CEO, Star Xu, recently issued a warning to users about the risks associated with interacting with the sanctioned crypto mixer, Tornado Cash. Xu emphasized that deposits from entities such as Garantex and Tornado Cash, or withdrawals to these entities, could trigger compliance risks leading to account suspension. This highlights the importance of understanding and adhering to relevant sanctions policies, especially those from the US.
Xu clarified that OKX does not onboard customers from the Specially Designated Nationals (SDN) List and cannot provide services to sanctioned individuals or entities. He mentioned that this policy has been in effect for some time, indicating the exchange’s commitment to compliance. Xu further stated that if sanctions controls are activated due to interaction with sanctioned exchanges or DeFi protocols, OKX’s compliance team may freeze funds and off-board the account.
Following Xu’s warning, a user named Satoshi Friends made a public appeal to OKX users from Commonwealth of Independent States (CIS) countries, urging them to withdraw their funds from the platform. He highlighted the strict policies enacted by the exchange, leading to sudden account blocks, fund freezes, and asset losses. Influencers were among those affected, with resolution only achieved after direct engagement with the OKX team.
Federal Reserve Bank Report on Tornado Cash
OKX’s warning coincided with a report from the Federal Reserve Bank of New York, assessing the impact of US sanctions on Tornado Cash. The report revealed a significant impact on the usage of the crypto mixer, with larger pools on the platform not fully recovering to pre-sanction levels. However, smaller pools showed some recovery, indicating sustained interest from retail users. Tornado Cash, founded in 2019 by Russian nationals, was sanctioned by the US Department of Treasury in 2022 for facilitating illicit fund laundering activities.
The warning from OKX CEO Star Xu serves as a reminder of the compliance risks associated with interacting with sanctioned entities like Tornado Cash. Users must exercise caution and stay informed about sanctions policies to avoid potential account suspension and financial losses. The impact of sanctions on platforms like Tornado Cash underscores the broader implications of regulatory actions in the crypto space, highlighting the need for users and exchanges to prioritize compliance and risk management.
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