OKX Targets Tornado Cash Users with Account Closures

The exchange strengthens its compliance measures to align with international sanctions, raising concerns among users.

OKX, one of the leading cryptocurrency exchanges, has taken a firm stance against users interacting with Tornado Cash, a decentralized mixing service often used to obfuscate cryptocurrency transactions. CEO Star Xu announced that any account found engaging with Tornado Cash would face immediate termination. This move is part of a broader effort to comply with international sanctions, particularly U.S. policies.

The crackdown follows concerns that Tornado Cash has been exploited by malicious actors to launder stolen funds. Xu emphasized that deposits from sanctioned entities like Tornado Cash or attempts to withdraw funds to such entities would trigger the exchange’s risk control systems, leading to account closures. "We are required to comply with applicable sanctions policies, including U.S. sanctions," Xu stated.

The announcement comes after a public outcry from a user named Satoshi Friends, who urged users from the Commonwealth of Independent States (CIS) to withdraw their funds from OKX and avoid the exchange due to its strict compliance measures. He claimed that several influencers had their accounts blocked, with partial resolutions only achieved after direct intervention with OKX.

Xu responded by acknowledging that the user's account had multiple transactions linked to sanctioned exchanges or DeFi protocols. The user was allowed to withdraw clean funds before the account was blocked. However, OKX refused to transfer the user’s data to a new account, citing compliance policy violations.

Xu reassured most users that they are unlikely to be affected by these measures, emphasizing that OKX does not onboard customers on the Specially Designated Nationals list and cannot offer services to sanctioned individuals or entities. This crackdown highlights OKX's commitment to maintaining compliance, even as it raises concerns among some users about the potential for sudden account closures.

photo source / Blockonome