dYdX blocked user accounts Tornado Cash

The decentralized derivatives exchange dYdX confirmed the blocking of accounts of users who had previouslyinteracted with the Tornado Cash mixing service.

The platform has clarified that it usesCompliance services for regulatory compliance from a third party provider. After the US Department of the Treasury imposed sanctions against the mixer for laundering $ 7 billion, the provider flagged accounts related to Tornado Cash. The marketplace system activated the restrictions automatically.

«Many accounts have been blocked,because a certain portion of the funds in the wallet (in many cases, even insignificant amounts) were at some point associated with Tornado Cash,” the team said.

dYdX acknowledged that the sudden spate of bans affected “many users” who were often unaware of the origin of their funds and did not directly use the mixer.

The platform has made appropriate adjustments tocompliance policy that allowed certain accounts to be unblocked. However, some restrictions on flagged funds will remain, the team noted.

«As a reminder, dYdX does not have the abilityseize client funds. All users who deposit into the protocol can always withdraw assets and store them themselves,” the platform said in a statement.

Previously, as part of compliance with sanctionsrestrictions, Circle blacklisted the USDC addresses of 38 Tornado Cash wallets. One of the stablecoin operators blocked the movement of at least 75,000 USDC.

Against the backdrop of these developments, the MakerDAO DeFi project began developing a plan in case the protocol’s core smart contracts fall under government sanctions, according to The Defiant.

According to Daistats, the share of USDC in securing the DAI stablecoin of the project is  about 33% with an indicator of ~$2.6 billion.

The publication noted that other DeFi projects are also considering plans to reduce dependence on USDC.

The Block experts noted that afterthe introduction of sanctions and blocking of the Tornado Cash website, the daily volume of transactions in the service increased from $2.45 million to $2.99 million. They associated this with the protest of users who send many transactions mainly for 0.1 ETH. 

The flash mob was launched by an unknown person, who on August 9sent small sums through the mixer to famous people. Among the recipients were EthHub co-founder Anthony Sassano, Loomdart crypto trader, Coinbase CEO Brian Armstrong, TV host Jimmy Fallon, YouTuber Logan Paul and Randy Zuckerberg.