FTX To Block Aztec Network Privacy DApp

Photo Source

"FTX has reportedly begun blocking accounts that have sent coins through zk.money, a private layer-2 chain provided by the Aztec Network on Ethereum. According to Twitter users, FTX has identified the DApp as a mixer — a service it deems a 'high-risk activity' prohibited by the exchange" [Andersen, D. FTX blocks Aztec Network privacy DApp, calling it a ‘high risk’ mixer. (Accessed August 21, 2022).

Photo Source

In response, Aztec likewise took to Twitter posting the following long but worthy thread:

Photo Source

Some users noted that Aztec Network is a privacy solution and should not be treated on the same terms as mixing services like Tornado Cash [...] zk money is a layer-2 privacy solution built on the Aztec network which enables users to perform transactions without compromising their privacy. Transaction data can be shielded from the public but the owner can choose who and what to share if the need be.

[Nwobodo, C. FTX users complain about fund freezes after interacting with privacy protocol Aztec Network. (Accessed August 21, 2022)].

Photo Source

"Twitter users noted that the blocking of transactions linked to the protocol could indicate a ban with wide-reaching consequences similar to those imposed by US Treasury Department on Tornado Cash users. On Aug. 8, the U.S. agency listed more than 40 USDC and ETH addresses to the Office of Foreign Asset Control’s (OFAC), List of Specially Designated Nationals" [Argyros, E. Crypto Exchange FTX Has Blocked Aztec Mixer DApp Due to High Risk. (Accessed August 21, 2022); see, also Nagoda, K. U.S. Treasury OFAC Bars Residents From Using Tornado Cash and Added 44 Addresses to the Specially Designated Nationals List(Accessed August 21, 2022)].

Aztec Network CEO Zac Williamson took to Twitter with a long thread on Monday commenting on the situation surrounding Tornado Cash, days prior to FTX's apparent action against the network. 'There is a place for regulation in Web3. It is not at the network level. It is at the application level,' Williamson wrote, adding: 'The depressing thing is that we’ve been through this already with the World Wide Web. We don’t arrest internet service providers for the data in their cables. We don’t arrest DNS providers for signing illegal traffic.”

[Andersen, supra].

"While FTX has yet to make an official statement, FTX CEO Sam Bankman-Fried responded to the uproar on Twitter by suggesting that reports of account freezes had been 'garbled.' 'We are constantly monitoring transactions for AML compliance, and do enhanced due diligence on certain transactions, but that does not mean that any accounts were frozen,' he tweeted.

[Nelson, J. Ethereum Privacy Platform Aztec Responds to FTX 'Freezing' User Accounts. (Accessed August 21, 2022)].

Photo Source

"While a core tenet and source of pride among crypto projects, privacy has been demonized by those in power, including lawmakers, regulators, banks and academics" [Ditto, T. Central authorities have demonized privacy — Crypto projects must fight back. (Accessed August 21, 2022)]. Oh ... and now add crypto exchanges to this list.

Posted Using LeoFinance ^Beta