- Reputable ENS addresses apparently got 0.1 ETH from sanctioned addresses.
- A Tornado Cash developer was apprehended in the Netherlands yesterday.
The Office of Foreign Assets Control (OFAC) of the United States Treasury Department has sanctioned crypto mixer Tornado Cash, dealing a blow to the crypto sector. Several Twitter users have reported that the major DeFi lender Aave has begun banning addresses linked to Tornado Cash.
Reputable ENS addresses apparently got 0.1 ETH from sanctioned addresses. Platforms like Uniswap, Aave, and Balancer within the DeFi ecosystem have responded by freezing Tornado Cash-funded accounts.
Aave has been blocking the wallet addresses of notable users including Justin Sun (Tron’s creator), Sassal0x, and Shixing Mao (co-founder of Cobo crypto custodian). Over 600 addresses, including those of famous people and centralized exchanges, have received 0.1 ETH from the Tornado Cash 0.1 ETH contract, as reported by PeckShieldAlert.
#PeckShieldAlert Over 600 addresses received 0.1 $ETH from https://t.co/LLczi0PVvh: 0.1 ETH contract which was added to the OFAC sanction list, including Big Names and Centralized exchanges.
— PeckShieldAlert (@PeckShieldAlert) August 13, 2022
Some users claimed that they were blocked by @AaveAave due to the "airdrop". https://t.co/WeXfpiSi7N pic.twitter.com/cB4M5T29Ya
Decentralization at Risk?
Because several DeFi systems have blacklisted addresses, including Aave, Uniswap, Balancer, dYdX, Alchemy, and Infura, the concept of “decentralization in DeFi” has gained negative attention. Even popular websites like Discord and Github have discontinued the crypto mixer-related services.
It poses a serious threat to the concept of decentralization. These blockchain-centric businesses are not subject to any government oversight. The whole idea of decentralization is undermined when people freely share information or conform to the law without oversight.
Furthermore, a Tornado Cash developer was apprehended in the Netherlands yesterday. Since just the wallet’s interface is being banned by the Dapps, users may still access it by simply switching to a different front end. It is unclear, however, whether or not these addresses would be blocked by DeFi platforms’ smart contracts.
After the Office of Foreign Assets Control of the United States, Treasury Department put Tornado Cash on its Specially Designated National list, it was quickly forbidden by numerous businesses and organizations.
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