OKX to close accounts interacting with Tornado Cash

OKX chief operating officer Star Xu has warned account holders against Tornado Cash (TORN), saying that any interaction with the platform will result in a ban.

In a statement published on X, the CEO announced that previously sanctioned users will not be allowed to open new accounts on OKX. Additionally, the crypto exchange will close accounts of users who deposited funds from sanctioned entities such as Tornado Cash (TORN) and Garantex, according to the statement.

被制裁的人无法在okx成功开户。

In other words:
1. Garanti Bank Garantex and Tornado cash okx
2. 从okx提币去被制裁的主体

都会触发合规风控,导致被清退账户。

https://t.co/MTJ7OtQRny

— Star (@star_okx) August 9, 2024

OKX appears to be implementing these measures to comply with global laws by limiting the use of crypto mixers. Assets like Tornado Cash have become the target of regulators worldwide, who claim that crypto mixers are widely used to transfer illicit funds and are the preferred tools of international criminal networks, with rogue states like North Korea also found to be using such services.

Regarding the Tornado Cash and OKX attack, the cryptocurrency exchange is trying to regain users’ trust following a series of vulnerabilities that caused them to lose funds in June.

According to Crypto.news, two OKX users suffered significant financial losses as a result of a suspected SIM card attack.

Blockchain security firm Slowmist suspects the incident was caused by a flaw in the exchange’s two-factor authentication (2FA) system, which led to unauthorized access to accounts.

Security incidents have shaken trust in OKX. The cryptocurrency exchange is now trying to regain the trust of the community by following global regulatory laws.

Earlier this year, the United States House of Representatives proposed a bill called the Blockchain Integrity Act, which aims to ban crypto mixers for two years. Introduced by Democratic U.S. Representative Sean Casten, the bill aims to prohibit virtual asset service providers and other registered money service businesses from accepting funds routed through a mixer or allowing withdrawals directly to a mixer’s address. Any violation of this rule will result in a civil penalty of up to $100,000.

The House of Representatives’ views on Tornado Cash were also supported by the European Union, which banned crypto mixers and privacy coins in April while requiring monitoring of non-custodial wallets.

With regulatory hurdles pointing to a solution (or even outright ban) for crypto mixers, organizations like Tornado Cash and exchanges that allow their tokens to be traded and listed could soon be listed among black market cryptocurrencies.