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DEX dYdX Blocks Tornado Cash Affiliated Accounts Citing US Sanctions
Since the cryptocurrency service provider was banned by the US agency OFAC earlier this week, Tornado Cash has been under attack.
This week, the Office of Foreign Asset Control (OFAC) and the US Treasury imposed an outright ban on Ethereum, putting the decentralized non-custodial privacy solution therein in serious jeopardy.
The government not only forbade its residents from utilizing the services, but it also established similar guidelines for cryptocurrency firms, telling them not to collaborate with the platform. Since that time, dYdX has been the first decentralized exchange to take action in its direction.
After a tornado
The DEX gave its clients an explanation of the cause of the Tornado Outage on the platform in a blog post published yesterday.
As the $625 million Axie Infinity Ronin Bridge assault, where Tornado was utilized as a way to transport the stolen cash around, is one of the most well-known hacks in the history of cryptocurrency, the OFAC banned Tornado Cash.
Beyond this, however, Tornado's privacy regulations made it a go-to for thieves. Thus, the OFAC declared it obligatory to avoid Tornado Crash in order to eliminate the likelihood that the same would be sponsored from inside the nation.
As a result, a sizable number of customers saw that dYdX had disabled their accounts because of their connection to Tornado Cash, according to what the DEX had to say.
"This sudden influx of flags affected many account holders who have never directly interacted with Tornado Cash, and frequently such users do not realize the origin of the funds transferred to them during various transactions prior to interfacing with our platform, but we must nonetheless maintain certain restrictions," said Tornado Cash.
A terrifying storm with a tornado
Things started to fall apart as the crypto facilitator platform dealt with OFAC prohibitions, and in only three days, the network's native token, TORN, reached new lows.
Trading for TORN was spotted at $16.3, down from $30 less than a week ago, a drop of more than 45%.
Investor losses as a result of this abrupt blacklisting are unprecedented since the platform has been permanently blacklisted, making it unable to recoup from the price collapse of 45%.
And now that both DeFi and non-DeFi crypto exchanges are acting in this way, things are only going to grow worse for TORN moving ahead.
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