OKX CEO Star Xu has warned users about the risks of interacting with sanctioned crypto mixer Tornado Cash.
In an August 9 statement via social media platform
Compliance measures
Xu emphasized that OKX adheres to all relevant sanctions policies, including those of the US. As a result, the exchange does not accept clients from the Specially Designated Nationals (SDN) list and cannot provide services to sanctioned individuals or entities.
He also clarified that this policy was not new and had been in place for some time. Xu stated:
“If our sanctions controls are triggered as a result of deposits or withdrawals to a sanctioned exchange or DeFi protocol such as Garantex or Tornado Cash, our compliance team can freeze the related funds and deboard the account.”
The warning follows a public call from an X-user known as Satoshi Friends, who urged exchange users from Commonwealth of Independent States (CIS) countries to withdraw their funds from the platform.
According to him, the exchange has implemented strict policies that have led to sudden account freezes, freezing of funds and loss of assets. He claimed that these actions had serious consequences for several influencers, who had their accounts frozen and their funds restricted, and that resolutions were only reached after working directly with the OKX team.
Using Tornado Cash
OKX’s warning follows a report from the Federal Reserve Bank of New York assessing the impact of US sanctions on Tornado Cash.
According to the report, the sanction had a telling impact on the way the crypto mixer was used. Larger pools on the platform have not yet fully recovered to pre-sanction levels. However, smaller pools have shown some recovery, indicating continued interest from retail users.
Tornado Cash was founded in 2019 by Russian citizens Roman Semenov and Roman Storm. In 2022, the US Treasury Department sanctioned the platform for helping launder more than $7 billion in illicit funds from malicious actors such as the North Korea-backed Lazarus Group.