In a move designed to bolster financial accountability and adhere to international sanctions, OKX CEO, Star Xu, has announced that the exchange will terminate any accounts found to be interacting with Tornado Cash. This decision addresses increasing anxieties about Tornado Cash, a decentralized mixing service that allows users to cloud the origin and destination of their cryptocurrency transactions, and its misuse by malicious actors to launder stolen funds.
The CEO highlighted that if users deposit money from prohibited entities such as Garantex and Tornado Cash into OKX accounts or attempt to transfer funds from OKX to these organizations, the exchange’s risk-control systems would be activated, leading to the termination of these accounts. “We are required to comply with relevant sanction policies, including US sanctions,” Xu confirmed.
These stringent measures by OKX came after a public appeal by a user known as Satoshi Friends. They encouraged their community and users from the Commonwealth of Independent States (CIS) countries to urgently withdraw all investments from OKX and firmly discontinue using the exchange. The user cited severe policies and personal experiences, claiming that users risk encountering sudden account closures, fund freezes, and asset losses.
Responding to the user’s grievances, Xu admitted that the user’s account featured several substantial transactions related to sanctioned exchanges or DeFi protocols. The CEO highlighted that the user was permitted to withdraw his legitimate funds before blocking his account. Nevertheless, OKX denied transferring the user’s data from an old account to a new one, stating it would violate their compliance policy and potentially create a loophole.
Tornado Cash’s recent misuse to clean funds stolen from various protocol attacks has drawn attention. On August 7, the hacker behind the assault on the Rain crypto exchange began laundering 1,155 Ether through Tornado Cash.