OKX CEO Star Xu recently issued a warning to users about the potential risks associated with interacting with the sanctioned crypto mixer Tornado Cash. In his statement, Xu highlighted that deposits from sanctioned entities such as Garantex and Tornado Cash, as well as withdrawals to these entities, could trigger compliance risks and potentially lead to account suspension. He emphasized that OKX strictly adheres to all relevant sanctions policies, particularly those enforced by the US, and does not onboard customers from the Specially Designated Nationals (SDN) List. As a result, the exchange cannot provide services to sanctioned individuals or entities.
The warning from OKX comes in response to a public appeal made 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. According to Satoshi Friends, OKX’s implementation of strict policies has resulted in sudden account blocks, fund freezes, and asset losses for some users. He mentioned that several influencers had their accounts blocked and funds limited, with resolutions only achieved after direct engagement with the OKX team.
OKX’s warning also coincides with a report from the Federal Reserve Bank of New York that assessed the impact of US sanctions on Tornado Cash. The report revealed that the sanctions had a significant impact on the usage of the crypto mixer, with larger pools on the platform failing to fully recover to pre-sanction levels. However, smaller pools have shown signs of recovery, indicating sustained interest from retail users.
Tornado Cash, founded in 2019 by Russian nationals Roman Semenov and Roman Storm, gained notoriety in the crypto space for its privacy-focused services. However, in 2022, the US Department of Treasury sanctioned the platform for its involvement in laundering over $7 billion in illicit funds from malicious actors like the North Korea-backed Lazarus Group.
The warning issued by OKX CEO Star Xu serves as a cautionary reminder to users about the potential risks associated with using sanctioned crypto mixers like Tornado Cash. It underscores the importance of compliance with sanctions policies and the consequences that users may face if they disregard such warnings. Users are advised to exercise caution and conduct thorough research before engaging with any crypto platforms to avoid facing compliance issues and potential losses.
