Derivatives Protocol DyDX Blocks User Accounts Linked With Sanctioned Ethereum Mixer App Tornado Cash

  • DyDX has blocked user accounts linked with Tornado Cash
  • DyDX has joined a growing list of platforms who have been actively blocking user accounts of people who had earlier been in contact with sanctioned Tornado Cash app

In an updated blog post, derivatives protocol DyDX has confirmed that it has banned certain user accounts that previously had ties with now banned ethereum mixer app Tornado Cash. 

DyDX Bans User Accounts Linked With Tornado Cash

Tornado Cash outage is now gaining momentum with DyDX exchange issuing a statement, adding that it has blocked certain user accounts that were previously connected with the notorious ethereum mixer app. 

JUST IN: dYdX exchange confirms blocking wallets tied to Tornado Cash.

“dYdX recently became aware of a significant increase in accounts flagged by our compliance provider that were subsequently blocked by dYdX. Many accounts were blocked because a certain portion of the wallet’s funds (in many cases, even immaterial amounts) were associated at some time with Tornado Cash, which was recently added to the sanctions list by the U.S. Treasury’s OFAC.” The blog later added

The exchange later admitted that it had inaccurately banned certain user accounts which it later unblocked. The exchange said that these unblocked accounts did not interact with Tornado Cash and that these “users do not realize the origin of the funds transferred to them during various transactions prior to interacting with our platform “

“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” the blog post adds. 

We were recently made aware of an issue related to Tornado that was causing many wallet addresses to be blocked from accessing our exchange. We have rectified this and you can read the full announcement here:

Tornado Cash, a popular Ethereum transaction mixer app, was recently banned by the US due to its growing involvement with unethical and fraudulent activities. 

The hackers and scammers have been extensively using Tornado cash to drain funds out of exchanges and user wallets and later using the notorious mixer app to obfuscate the funds tracking, rendering it difficult for the authorities to trace the stolen funds. 

DyDX later added that the exchange is committed to maintaining certain restrictions and that it will continue to block accounts that have interacted with the sanctioned app Tornado Cash. 

“This sudden influx of flags affected many account holders that never directly engaged with Tornado Cash, and often such users do not realize the origin of the funds transferred to them during various transactions prior to interacting with our platform, but we must nevertheless maintain certain restrictions.” The blog post reads

DyDX has joined the growing list of exchanges that have restricted their business with Tornado Cash. Earlier, Alchemy, which is an ethereum infrastructure provider had blocked Tornado Cash users from accessing its nodes. GitHub had also followed a similar trajectory by deleting the accounts of Tornado Cash contributors on its platform. 

Here’s the list of Tornado Cash resources that were banned

– Tornado Cash @GitHub organization
– personal @GitHub accounts of TC contributors
– all $USDC on Tornado Cash contracts @circlepay
– @infura_io RPC
– @AlchemyPlatform RPC
– domain @eth_limo

As a result of these continuous bans and blockages, Tornado Cash’s native token TORN has plunged to new lows, plummeting 45% after the US Treasury announced strict restrictions on its usage and utility. 

image: DyDX/Twitter

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