By Godfrey Benjamin
Edited by Julia Sakovich
Updated
3 min read
With such precedence, OKX CEO Star Xu warns users about depositing or attempting to withdraw funds from sanctioned entities like Garantex and Tornado Cash into OKX accounts.
In a bid to ensure the security of this platform, top cryptocurrency exchange OKX has given a stern warning to any of its accounts found interacting with Tornado Cash. The exchange, which is trying to reinforce financial integrity and improve compliance measures amid international sanctions, noted that it would terminate any accounts that fall into the previously described categories.
The growing incidence of scams and Tornado Cash’s involvement in such illicit activities has sparked concerns among industry stakeholders lately.
Noteworthy, Tornado Cash is a decentralized crypto-mixing service that is used to obfuscate the source of digital assets. Oftentimes, traders use the service to stay anonymous or to hide their crypto footprint. However, crypto scammers see crypto mixers like Tornado Cash as an opportunity to conduct their operations.
Over time, Tornado Cash has become the platform known for its connections with malicious attacks. In 2022, it faced one of its biggest challenges due to the United States Treasury Department Office of Foreign Assets Control (OFAC) sanction. The agency accused the platform of facilitating the laundering of up to $7 billion by scammers.
With such precedence, OKX CEO Star Xu warns users about depositing or attempting to withdraw funds from sanctioned entities like Garantex and Tornado Cash into OKX accounts. As a consequence of such a transaction, OKX will close the initiating account. Any attempt to initiate these transactions is bound to trigger the exchange’s risk control mechanism, hence the account closure.
“We are required to comply with applicable sanctions policies, including US sanctions,” Xu added.
Xu’s announcement is a reaction to a public call from a user named Satoshi Friends. This user encouraged members of his community and users from the Commonwealth of Independent States (CIS) countries to desist from using the OKX exchange. Satoshi Friends advised them to withdraw their funds from the exchange immediately.
He cited his personal experience and the stringent policies on the platform as the basis for his call. In his opinion, there is a high risk of facing sudden account blocks, fund freeze and loss of assets on OKX. To give credence to his argument, Satoshi Friends pointed to a few influencers and high-profile individuals who had their accounts blocked. These entities allegedly only got partial resolution after intervention with the OKX team.
OKX CEO clarified that the accounts in question interacted with a couple of sanctioned exchanges or DeFi protocols. Still, the account remained open until he withdrew all his clean funds. All OKX refused to do is to transfer the user’s data from an old account to a new one.
For emphasis, Xu stated that the OKX exchange is keen on complying with regulatory requirements. Therefore, it would not onboard any customer on the Specially Designated Nationals (SDN) list.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
