OKX CEO Star Xu recently issued a warning to users regarding the potential risks associated with interacting with the sanctioned crypto mixer, Tornado Cash. In a statement shared on social media, Xu highlighted the importance of adhering to sanctions policies, especially those from the US. He pointed out that deposits from or withdrawals to entities like Garantex and Tornado Cash could trigger compliance risks and potentially lead to account suspension on the OKX exchange. This is not a new policy but has been in effect for some time, according to Xu.
Strict Policies and Fund Freezes
The warning from OKX comes after a user named Satoshi Friends encouraged individuals from Commonwealth of Independent States (CIS) countries to withdraw their funds from the platform due to strict policies that resulted in sudden account blocks, fund freezes, and asset losses. Several influencers were reportedly affected by these actions, with resolutions only being reached after direct engagement with the OKX team. The exchange has been implementing stringent measures to ensure compliance with sanctions regulations.
Impact of US Sanctions on Tornado Cash
The warning from OKX coincides with a report from the Federal Reserve Bank of New York that assessed the impact of US sanctions on Tornado Cash. The report noted a significant effect on the usage of the crypto mixer, with larger pools on the platform not fully recovering to pre-sanction levels. However, smaller pools have shown some recovery, indicating ongoing interest from retail users. Tornado Cash, founded by Russian nationals Roman Semenov and Roman Storm in 2019, was sanctioned by the US Department of Treasury in 2022 for its alleged involvement in laundering illicit funds.
The warning issued by OKX CEO Star Xu serves as a reminder to users about the importance of complying with sanctions policies and the potential consequences of interacting with sanctioned entities like Tornado Cash. As regulatory scrutiny in the crypto space continues to increase, exchanges are compelled to implement strict measures to mitigate risks and ensure compliance with international regulations. Users should exercise caution and stay informed about the evolving regulatory landscape to avoid running into legal issues or account suspension on trading platforms.
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