OKX CEO, Star Xu, recently issued a warning to users about the potential risks associated with interacting with the sanctioned crypto mixer, Tornado Cash. Xu stressed that deposits from sanctioned entities such as Garantex and Tornado Cash, or withdrawals to these entities, could trigger compliance risks and ultimately lead to account suspension. It is evident that OKX is committed to adhering to all relevant sanctions policies, including those outlined by the US government. As a result, the exchange does not onboard customers from the Specially Designated Nationals (SDN) List and is unable to provide services to sanctioned individuals or entities. This long-standing policy was reiterated by Xu to emphasize the consequences of violating these sanctions controls.
The warning issued by OKX CEO, Star Xu, comes in the wake of a public appeal from an X user known as Satoshi Friends. He urged exchange users from Commonwealth of Independent States (CIS) countries to withdraw their funds from the platform due to the strict policies enacted by OKX. These policies have resulted in sudden account blocks, fund freezes, and asset losses for some users. Influencers on the platform were particularly impacted, with their accounts being blocked and funds limited. Resolutions to these issues were reportedly only achieved after direct engagement with the OKX team. The implementation of these policies has raised concerns among users, prompting Xu to alert them to the potential risks associated with interacting with sanctioned entities like Tornado Cash.
OKX’s warning coincides with a report from the Federal Reserve Bank of New York, which assessed the impact of US sanctions on Tornado Cash. According to the report, the sanctions have had a noticeable effect on the usage of the crypto mixer. Larger pools on the platform have yet to fully recover to pre-sanction levels, indicating a decline in activity from certain users. However, smaller pools have shown some signs of recovery, suggesting that there is still interest from retail users in utilizing Tornado Cash for their transactions. The platform, founded in 2019 by Russian nationals Roman Semenov and Roman Storm, came under scrutiny in 2022 when the US Department of Treasury sanctioned it for aiding in the laundering of over $7 billion in illicit funds from entities like the North Korea-backed Lazarus Group.
The warning issued by OKX CEO, Star Xu, serves as a reminder to users about the importance of compliance with sanctions policies and the potential consequences of engaging with sanctioned entities like Tornado Cash. It highlights the need for users to be vigilant and exercise caution when conducting transactions involving these entities to avoid any compliance risks or account suspensions.
