FTX Freezes Privacy Platform ‘Aztec Networks’ Accounts

FTX Freezes Privacy Platform ‘Aztec Networks’ Accounts
  • Aztec claims it has made improvements to discourage money laundering.
  • This caution follows the United States government’s contentious decision.

On Friday, Aztec Network, an Ethereum-based privacy-enhancing smart contract platform, responded on Twitter to user concerns that FTX, one of the world’s biggest cryptocurrency exchanges, is “freezing” the accounts of users who have previously transacted with Aztec.

In a tweet published today, Aztec Network acknowledged rumors that FTX is advising consumers to avoid contact with Aztec. It claims to be actively preventing “would-be illicit users” from using its service, which facilitates anonymous communication between Ethereum traders and DeFi apps.

Crack Down on Mixing Service

The FTX account of a consumer who wired money to an Aztec address was reportedly stopped, as reported by Chinese analyst Colin Wu earlier today. According to a tweet posted by Wu, FTX “identified” Aztec as a “mixing service,” and the exchange advised its users to stay away from the platform.

This caution follows the United States government’s contentious decision to block access to the Tornado Cash Ethereum mixing service. The protocol and multiple wallet addresses were sanctioned by the U.S. Treasury Department last week, essentially barring its use by citizens and businesses inside the United States.

Aztec claims it has made improvements to discourage money laundering, such as reducing the rate of deposits and withdrawals and making it simpler to detect potentially suspect addresses. “We will not be passive in stopping illicit behavior,” it tweeted.  In a Twitter post, the organization said that it had contacted FTX and will be “pursuing conversations with global regulators, centralized exchange entities, and consumers.”

Although FTX has not issued a formal statement, CEO Sam Bankman-Fried replied to the outrage on Twitter by implying that stories of account freezes had been “garbled.”

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