OKX will disable accounts linked to sanctioned entities, including Tornado Cash and Garantex

OKX is all set to disable accounts linked to sanctioned entities, including crypto mixer Tornado Cash and Moscow-based crypto exchange Garantex.

On August 9, OKX CEO Star Xu emphasized the platform’s strict adherence to international sanctions compliance and clarified that such users will not be allowed to open accounts on the platform.

OKX enforces strict compliance

For those who have already opened accounts, any transactions involving deposits or withdrawals to sanctioned entities such as Garantex and Tornado Cash will trigger the platform’s compliance risk controls and terminate their accounts.

In a post on X, the executive assured users that while the penalties are crucial to regulatory compliance, they largely don’t affect the average user, who doesn’t need to worry about these measures unless that is directly involved with the sanctioned entities.

The controversy began after a customer, Satoshi Friends, revealed that Commonwealth of Independent States users could be abruptly locked out of their accounts or face frozen funds and possible asset losses.

This warning came after Satoshi Friends reported that their account, along with accumulated referrals, had been blocked and expressed concern that influencers recommending OKX could suffer financial and reputational damage.

In response, Xu clarified that Satoshi Friends had made several transactions related to sanctioned exchanges and DeFi protocols, which caused OKX to terminate the account due to compliance issues.

The executive also noted that OKX allowed the user to withdraw net funds before the account was locked, but could not accommodate a request to transfer data to a new account, as this would violate its policies on compliance and would be considered a referral.

“As a 12-year-old global crypto platform, we care about our reputation and the safety of customer funds like our lives. We don’t make money by freezing accounts, and we never steal 1 dollar from any customer’s funds. At the same time, we are required to comply with applicable sanctions policies, including US sanctions.”

Tornado Cash sees resurgence

Tornado Cash has witnessed a resurgence in 2024 despite being heavily sanctioned by the US government in 2022.

These sanctions, imposed by the Office of Foreign Assets Control (OFAC), initially caused a sharp decline in activity, with a drop in monthly deposits of over 90%. However, by mid-2024, Tornado Cash received over $1.9 billion in deposits, up 50% from all of 2023, largely driven by hackers using the platform to launder funds from major mining operations.

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