FTX Freezes User Accounts Interacting With Aztec Network

FTX has reported beginning blocking accounts that have sent coins through zk.money of Aztec Network. FTX has identified the DApp as a mixer. Aztec has now responded to the claims by reiterating its core values and confirming that it “will not be passive in stopping illegal behavior.”

On the evening of August 18, a series of Twitter accounts complained about having their FTX accounts frozen for interacting with Aztec Network’s zk.money, claiming that the DApp was a mixer – a service deemed “high-risk activity” by the exchange is prohibited.

CEO Sam Bankman-Fried responded but neither confirmed nor denied that any accounts had been frozen.

Aztec further commented that it is working on a series of improvements that will “practically eliminate the ability of bad actors to move stolen funds through Aztec”. These include deposit caps, rate-limiting, pending deposit caps, and modifying the “escape hatch window.”

The upgrades will result in the following updates to the Aztec Network:

  • Slow the rate of deposits and withdrawals
  • Make it easier to identify at-risk addresses
  • Prevent illicit users from sidestepping Falafel, the open-source implementation of Aztec’s rollup

Unlike other web3 protocols, which have either had to close down or abide by U.S. sanctions, Aztec have taken a different approach. The network argues that it “restricts behavior, rather than individuals”.

The network declared, “if our network is used to harm users, we’ve failed our mission.” It also confirmed “working with partners to identify those using stolen funds and unmask them using publicly available information *outside* of the Aztec system.”

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