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FTX Freezes User Accounts Interacting With Aztec Network

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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 β€œwill not be passive in stopping illegal behavior.”
FTX

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 β€œpractically eliminate the ability of bad actors to move stolen funds through Aztec”. These include deposit caps, rate-limiting, pending deposit caps, and modifying the β€œescape hatch window.”
FTX

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 toΒ close downΒ orΒ abideΒ by U.S. sanctions, Aztec have taken a different approach. The network argues that it β€œrestricts behavior, rather than individuals”.

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

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