OKX Founder Explains Ban on Accounts Linked to Tornado Cash

Star Xu, the founder of OKX, has addressed growing speculations regarding the platform’s handling of accounts connected to Tornado Cash. Notably, Tornado Cash’s ability to anonymize Bitcoin transactions has drawn regulatory attention in recent times. When a few publications reported a new policy, Xu clarified that his exchange’s compliance mechanism has always included the practice of canceling accounts that communicate with Tornado Cash.

Tornado Cash, a decentralized mixing service extensively utilized by privacy-conscious users, has also drawn regulatory interest because of its involvement with money laundering operations. This has resulted in Tornado Cash being added to sanctions lists, notably from institutions like the United States Treasury’s Office of Foreign Assets Control (OFAC).

Being a leading global crypto exchange, OKX has always adhered to strict compliance measures in line with international sanctions. This includes blocking accounts that interact with sanctioned entities like Tornado Cash, Garantex, and more. Xu says that this approach is integral to maintaining the platform’s integrity and ensuring a secure environment for its users.

Star Xu’s Clarification

In response to the latest set of reports by various publications, Xu highlighted that the policy has been in place for quite some time and is intended to meet international regulatory requirements. Xu reminded users on X that his exchanges risk control systems are regularly updated to detect and resolve contacts with sanctioned entities, resulting in the deletion of any accounts discovered in violation.

It’s not a new policy, it applied long time before. 🙏 https://t.co/4AeDMh5E0Q

— Star (@star_okx) August 9, 2024

Xu also addressed concerns voiced by some users and influencers about unexpected account freezes and financial losses. He stated that these procedures are only intended for people who interact with sanctioned companies and that the great majority of the exchange’s users who operate within legal borders have nothing to worry about.

Speculation and Public Reaction

The rumors regarding the exchange’s execution of their Tornado Cash policy have created widespread concern among their existing customers. Some members of the community, particularly those from Commonwealth Independent States (CIS), have suggested others take out all their funds for fear of unwarranted account terminations. That Xu responded well and provided much solace to compliant customers while reaffirming the exchange’s commitment to regulatory compliance becomes clear.

The exchange has made headlines for reasons that are far from positive for privacy-concern users. By explaining that the account suspension policy is not a new enforcement action, Xu sought to assuage concerns and emphasize the platform’s dedication to providing a secure trading environment for its customers.

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