OKX is all set to deactivate accounts involved with sanctioned entities, including crypto mixer Tornado Cash and Moscow-based crypto exchange Garantex. On August 9th, OKX CEO Star Xu highlighted the platform’s strict adherence to compliance with international sanctions and clarified that such users will not be able to open accounts on the platform. OKX Enforces Strict Compliance For those who have already opened accounts, any transactions involving deposits from or withdrawals to sanctioned entities, such as Garantex and Tornado Cash, will activate the platform’s compliance risk controls and terminate their accounts. In a post on X, the exec reassured users that while sanctions are crucial for regulatory adherence, they largely do not impact the average user, who need not
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OKX is all set to deactivate accounts involved with sanctioned entities, including crypto mixer Tornado Cash and Moscow-based crypto exchange Garantex.
On August 9th, OKX CEO Star Xu highlighted the platform’s strict adherence to compliance with international sanctions and clarified that such users will not be able to open accounts on the platform.
OKX Enforces Strict Compliance
For those who have already opened accounts, any transactions involving deposits from or withdrawals to sanctioned entities, such as Garantex and Tornado Cash, will activate the platform’s compliance risk controls and terminate their accounts.
In a post on X, the exec reassured users that while sanctions are crucial for regulatory adherence, they largely do not impact the average user, who need not be concerned about these measures unless directly involved with sanctioned entities.
The controversy first started after a customer, Satoshi Friends, revealed that users from the Commonwealth of Independent States might be abruptly blocked out of their accounts or face frozen funds and potential loss of assets.
This warning came after Satoshi Friends reported that their account, along with accumulated referrals, had been blocked, and expressed concern that influencers recommending OKX might face both financial and reputational damage.
In response, Xu clarified that Satoshi Friends had conducted several transactions involving sanctioned exchanges and DeFi protocols, prompting OKX to terminate the account due to compliance issues.
The exec also noted that OKX allowed the user to withdraw clean funds before the account was blocked but could not accommodate a request to transfer data to a new account, as this would violate their compliance policies and be considered a bypass.
“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. At the same time, we are required to comply with applicable sanctions policies including US sanctions.”
Tornado Cash Sees Resurgence
Tornado Cash has witnessed a resurgence in 2024 despite being heavily sanctioned by the US government in 2022.
These sanctions, imposed by the Office of Foreign Assets Control (OFAC), initially caused a sharp decline in activity, with monthly deposits dropping over 90%. However, by mid-2024, Tornado Cash received over $1.9 billion in deposits – 50% more than in all of 2023 – largely driven by hackers using the platform to launder funds from major exploits.