OKX CEO Star Xu recently issued a warning to users regarding the potential risks associated with interacting with the sanctioned crypto mixer, Tornado Cash. Xu emphasized that deposits from sanctioned entities, including Garantex and Tornado Cash, or withdrawals to these entities could trigger compliance risks and lead to account suspension. This highlights the importance of users being cautious when engaging with certain platforms in the crypto space.
Xu made it clear that OKX adheres to all relevant sanctions policies, particularly those from the US. The exchange does not onboard customers from the Specially Designated Nationals (SDN) List and cannot provide services to sanctioned individuals or entities. This policy, according to Xu, has been in effect for some time and is not new. Therefore, users should be aware of the potential consequences of depositing funds to or withdrawing funds from sanctioned exchanges or protocols.
User Appeals
Following Xu’s warning, a user known as Satoshi Friends urged exchange users from Commonwealth of Independent States (CIS) countries to withdraw their funds from the platform. This appeal suggests that strict policies enacted by OKX have resulted in sudden account blocks, fund freezes, and asset losses for some users. The impact of these actions has been significant, especially for influencers who had their accounts blocked and funds limited. Only through direct engagement with the OKX team were resolutions achieved.
The warning from OKX coincides with a report from the Federal Reserve Bank of New York, which assessed the impact of US sanctions on Tornado Cash. The report revealed that the sanctions had a noticeable effect on the usage of the crypto mixer. Larger pools on the platform have not fully recovered to pre-sanction levels, indicating a decrease in activity. However, smaller pools have shown some recovery, suggesting that retail users continue to show interest in the platform. Tornado Cash, founded in 2019 by Russian nationals, was sanctioned by the US Department of Treasury in 2022 for its involvement in laundering illicit funds.
The warning from OKX serves as a reminder to users in the crypto space to exercise caution when interacting with platforms like Tornado Cash that may be subject to sanctions. Understanding the potential risks and consequences of engaging with these platforms is essential to avoid compliance issues and account suspension.
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