Tornado Cash-Linked User Accounts Have Blocked by dYdX Exchange

Tornado Cash Sanctioned by U.S Agency Over Money Laundering
  • dYdX banned user’s accounts that utilized Tornado Cash.
  • Many users had no awareness they had received money from the crypto mixer.

The cryptocurrency exchange dYdX announced that it has blocked user accounts that even have a token link to Tornado Cash, the cryptocurrency mixing service that the U.S. Treasury sanctioned on Monday.

The US Department of the Treasury has sanctioned Tornado Cash, a cryptocurrency mixer, for money laundering. And the Treasury claims, that the Lazarus Group, a North Korean hacker group it has linked to the $625 million Ronin Network hack of Axie Infinity, used Tornado Cash. The mixer, which was intended to hide the source of cash, has seen the flow of tens of millions of dollars.

Reflection of Treasury Claims

The Treasury’s action increased the number of accounts that were flagged by dYdX’s compliance provider, which is used to indicate accounts that may be linked to malware, child sex abuse content, known criminals, and sanctions lists.

dYdX stated that;

We have made adjustments, within the limits of our compliance policies, that have unbanned certain accounts and we will continue to make efforts to limit flagging and track this issue moving forward.

However, the exchange made it clear that some accounts had been incorrectly blocked and that this had to be corrected. These users may not have been aware of the source of the money transferred to them because they hadn’t interacted directly with Tornado Cash, according to dYdX.

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