dYdX confirms the blocking (and unblocking) of certain accounts reported in the Tornado Cash controversy

The platform said it used compliance providers to find and report accounts potentially associated with illicit activity, including listings sanctions for many countries. New

Cryptocurrency derivatives trading platform dYdX said it blocked some users' accounts with Tornado Cash-related funds, including mistakenly suspending some who had never directly engaged with the mixer controversial.

In a blog post on Wednesday, dYdX said it had "unblocked some accounts" that the derivatives platform had blocked in response to the US Treasury Department's Office of Foreign Assets Control adding Tornado Cash to its list of Specially Designated Nationals, or SDNs. According to dYdX, its compliance provider flagged numerous accounts believed to be linked to Tornado Cash, which the platform then blocked – despite the fact that some had never done business with the crypto mixer. The platform said it used compliance providers to research and report accounts potentially associated with illicit activity, including sanctions lists for many countries.

"This sudden influx of flags has affected many account holders who have never directly interacted with Tornado Cash, and often these users do not realize the origin of the funds transferred to them in various transactions until they interact with our platform, but we still have to maintain some restrictions,” dYdX said.

We were recently made aware of an issue with Tornado that was preventing many wallet addresses from accessing our exchange. We've rectified that and you can read the full announcement here: https://t.co/h9TDZE1rne

According to dYdX, banning users was not tantamount to seizing funds, which they claimed would still be available for withdrawal...