OKX strictly implements sanctions policy, and your account will be banned if you interact with Tornado Cash

Cryptocurrency exchange OKX has recently attracted widespread attention and discussion in the community due to its strict compliance policies. Star Xu, founder of the exchange, publicly stated that any account that interacts with Tornado Cash will be liquidated without exception. The move is intended to ensure that OKX complies with international sanctions norms, particularly against individuals or entities on the U.S. sanctions list.

As a decentralized currency mixing service, Tornado Cash's main function is to protect user privacy by confusing transactions. However, due to this characteristic, it is also used by some malicious actors to launder illegally obtained funds. OKX said the exchange’s risk control system has been upgraded to automatically detect and terminate account activity involving Tornado Cash or other sanctioned entities.

Source: X OKX founder Star stated that any account that interacts with Tornado Cash will be liquidated without exception.

The community reacted fiercely, and KOL called on users to withdraw their funds

As OKX tightens its control over Tornado Cash, concerns arise in the community. A well-known overseas crypto KOL "Satoshi Friends" posted a message on the X platform, calling on users to immediately withdraw funds from OKX and permanently stop using the exchange. The user specifically mentioned that starting from May 2024, OKX has adopted a stricter policy on users from members of the Association of Independent States (CIS), resulting in their accounts being blocked without warning and funds frozen.

Image source: X Satoshi Friends posted a message on the X platform, calling on users to immediately withdraw funds from OKX and permanently stop using the exchange.

In response to Satoshi Friends’ accusations, Star stated that the account violated OKX’s sanctions control policy by being involved in multiple important transactions related to sanctioned exchanges or decentralized finance (DeFi) protocols. Star emphasized that the user had been allowed to withdraw "clean" funds before the account was blocked, but the request for data transfer between the old and new accounts was denied because it would bypass the exchange's compliance policy.

Risks and concerns: Poisoning attacks are a hidden concern

OKX’s strict control over Tornado Cash has also raised concerns among users about “poisoning attacks,” in which malicious actors send a very small amount of contaminated assets to other people’s wallet addresses through Tornado Cash, causing innocent users’ accounts to be frozen. Although Star stated that each case will be thoroughly investigated by compliance officers, and if it is indeed passive poisoning, it will not affect the normal use of user accounts, these explanations still fail to completely eliminate the community's concerns.

Source: X Star responded to the poisoning controversy by stating that each case will be thoroughly investigated by compliance officers.

Many users have questioned the lack of transparency in OKX's risk control standards, making it impossible to clearly understand whether they will suffer unnecessary risks of account freezes. This incident made OKX’s risk control measures the focus of community discussion, and also caused many users to consider whether they should continue to trust and use the platform.

This policy change of OKX will undoubtedly have a profound impact on its user groups and market image. As more users express dissatisfaction with its compliance measures, how OKX balances compliance requirements and user rights in the future will become the key to whether it can continue to maintain market competitiveness.

[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.