OKX CEO Star Xu recently issued a warning to users about the risks associated with interacting with the sanctioned crypto mixer Tornado Cash. Xu highlighted that deposits from sanctioned entities such as Garantex and Tornado Cash, or withdrawals to these entities could potentially trigger compliance risks, leading to account suspension. OKX, as a platform, follows strict sanctions policies, including those imposed by the US, which means that customers on the Specially Designated Nationals (SDN) List are not onboarded, and services cannot be provided to sanctioned individuals or entities.
Xu made it clear that this policy is not new and has been in effect for some time. He mentioned that if their sanctions controls are triggered due to interactions with sanctioned exchanges or DeFi protocols like Garantex or Tornado Cash, the compliance team may freeze related funds and off-board the account. This emphasizes the seriousness with which OKX takes compliance and the consequences users may face if they do not adhere to these policies.
The warning from OKX comes after a public appeal by a user known as Satoshi Friends, who urged exchange users from Commonwealth of Independent States (CIS) countries to withdraw their funds from the platform. The strict policies enacted by OKX have resulted in sudden account blocks, fund freezes, and asset losses, affecting several influencers on the platform. These users had to engage directly with the OKX team to resolve these issues, indicating the severity of enforcement by the platform.
Furthermore, 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. The report highlighted a significant impact 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 continued interest from retail users. Tornado Cash, founded by Russian nationals in 2019, was sanctioned by the US Department of Treasury in 2022 for its involvement in money laundering activities.
The warning from OKX CEO Star Xu serves as a reminder to users about the risks associated with interacting with sanctioned entities like Tornado Cash. Compliance with regulations and sanctions policies is crucial to avoid potential account suspension and fund freezes. Users must exercise caution and conduct due diligence when engaging with any crypto platforms to ensure their assets remain secure and compliant with regulatory requirements.