OKX starts blocking customers for transfers from crypto services on sanctions lists

What’s new? The head of the OKX crypto exchange Star Xu has said that individuals from sanctions lists will not be able to create an account on the platform. Moreover, already created accounts will be blocked if a user makes a deposit to OKX from an account at the Tornado Cash crypto mixer or the Garantex crypto exchange. Blocking awaits those who withdraw funds from OKX to these platforms as well.

Source: X.com

What else is known? Xu clarified that such actions “will result in the launch of a compliance risk control system and account cleanup.” However, he added that “ordinary people are far from sanctions and they do not need to worry about it.” This is how the senior executive responded to a subscriber’s question in X about where to read the exchange’s requirements to avoid accidental interaction with “dirty” tokens.

Tornado Cash was placed on the US sanctions list in August 2022 for processing transactions for DPRK hackers. Notably, Tornado Cash is a non-custodial smart contract and has no governing body. Despite this, developers Roman Strom, Roman Semenov, and Alexey Pertsev were later accused of money laundering, the latter receiving more than five years in prison. At the same time, the New York Fed recently stated that the sanctions against the service had an ambiguous effect and the amount of deposits only increased after the restrictions were imposed.

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As for Garantex, the United States imposed sanctions against it in April 2022 for processing transactions for the Russian group Conti, which specializes in extortion, as well as deliberate refusal to comply with anti-money laundering (AML) rules. In March of this year, Bloomberg reported that Garantex processed USDT transactions worth $20 billion already after the sanctions were imposed.

Thus, the interaction of an OKX account with funds from any of these platforms leads to its blocking. Given this fact, the purity of cryptocurrency should be checked before sending it to the exchange.

кнопка “Check crypto for purity”

After the publication of Star Xu, blogger Rafael Manvelyan, the author of major YouTube and Telegram channels SLEZY SATOSHI (СЛЕЗЫ САТОШИ), criticized the actions of the exchange and urged subscribers to stop using it, even though he has been a partner and active user of OKX since 2019.

He emphasized that previously OKX “worked honestly and steadily,” but since May this year, “the policy of the exchange and personally Star Xu has abruptly changed to a radical one with regard to users from the CIS:”

“Today I regretfully have to admit that the exchange’s policy and all the preconditions I have personally encountered compel me to urge my community and at least CIS users to urgently withdraw all funds from OKX and refuse to use the exchange for an indefinite period.”

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Moreover, Manvelyan said that his own account was blocked, and other CIS influencers, including the authors of the Telegram channel BOGDAN, GDE IKSY?! (БОГДАН, ГДЕ ИКСЫ?!) and the YouTube channel timurka i kripta (тимурка и крипта), found themselves in a similar situation. Manvelyan added that he managed to withdraw the funds only after dialog with the exchange’s team.

“Everyone is at risk, without exception. Both regular users and influencers/partners,” the blogger concluded.

Later, Star Xu personally commented on the blogger’s appeal. According to the head of the exchange, Manvelyan’s account violated OKX rules because it interacted with platforms from the sanctions lists.

Source: X.com

“You requested to set up a new account and transfer your data from old account to the new account. We really can’t do it because it is a kind of bypass our compliance policy,” the exchange’s head responded to the blogger.

Xu emphasized that the exchange cares about its reputation and the safety of customer funds, does not make money from freezing accounts, and will never steal a single dollar from customer funds. At the same time, OKX is obliged to comply with sanctions and cannot offer services to individuals and companies that have fallen under economic restrictions.

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Xu then reiterated that most OKX customers “never hear and don’t need to worry about these kind of compliance control because they are far from those sanction programs and will never conduct transactions related with a sanctioned Person.”

OKX is one of the world’s largest centralized exchanges (CEXs). In June, its trading volume on the spot market, according to analyst Colin Wu, amounted to $61,7 billion, and the volume of derivatives trading was $579,6 billion. The main traffic to the OKX website comes from Russia (10%), India (7%), and Ukraine (6%). Over the month, 29,4 million users visited the platform.