OKX Terminates Accounts Linked to Tornado Cash to Ensure Compliance

In a bid to uphold financial integrity and adhere to international sanctions, OKX CEO Star Xu has announced that the exchange will terminate any accounts found interacting with Tornado Cash. This decision reflects the rising concerns over Tornado Cash, a decentralized mixing service known for obscuring cryptocurrency transaction origins and destinations, and its increasing association with illicit activities, including laundering stolen funds.

Policy Shift and Community Reaction

OKX’s new policy mandates that accounts depositing funds from sanctioned entities such as Garantex and Tornado Cash, or attempting to withdraw to these entities, will face account closures. Xu emphasized that sanctioned individuals would be unable to open accounts at OKX, reinforcing the platform’s commitment to compliance with sanctions policies, including those imposed by the US.

Xu reassured ordinary users, stating that these sanctions should not cause undue concern. However, the policy shift has sparked debate on social media, particularly among users from Commonwealth of Independent States (CIS) countries.

Influencer Satoshi Friends, a long-time partner of OKX, has urged his followers, especially from CIS countries, to withdraw their funds and stop using the exchange. He cited recent policy changes that have led to unexpected account blocks and fund freezes, affecting several influencers. Satoshi Friends expressed regret over the changes, which he believes could pose risks to regular users and influencers alike.

CEO’s Clarification and Assurance

In response to these concerns, Xu addressed the community directly, clarifying the rationale behind the account blocks. He explained that accounts were blocked due to significant transactions related to sanctioned exchanges or DeFi protocols. He noted that affected users were allowed to withdraw clean funds before account termination, and that compliance policies prevented transferring data from old accounts to new ones.

Xu reiterated OKX’s commitment to customer fund safety and strict adherence to applicable sanctions policies. He assured users that the exchange does not profit from freezing accounts and has never misappropriated customer funds.

“As a 12-year global crypto platform, we take care of our reputation and the safety of customers’ funds as our life. We don’t make any money from freezing accounts and never steal 1 dollar from any customer’s funds,” Xu stated.

He also emphasized that users not involved with sanctioned entities are unlikely to be impacted by these measures.

Tornado Cash and Regulatory Scrutiny

The decision to terminate accounts linked to Tornado Cash comes amid ongoing concerns over its role in laundering stolen funds. On August 7, the hacker behind the Rain crypto exchange attack used Tornado Cash to launder 1,155 Ether, underscoring the challenges in maintaining cryptocurrency financial integrity. Additionally, PeckShield reported that an address connected to the Nomad Bridge exploit moved 14,500 Ether (approximately $35.2 million) to Tornado Cash earlier this week.

Tornado Cash developer Alexey Pertsev has also faced legal repercussions, recently being denied bail in the Netherlands and facing a five-year prison sentence for money laundering.