DeFi Platforms Block Tornado Cash Recipients

Notable wallets which were sent funds through a U.S. government-sanctioned cryptocurrency mixer were blocked by decentralized finance protocols’ websites, according to reports.

Crypto entrepreneur and Tron founder Justin Sun, among others, said he was being blocked from accessing the Aave website early Saturday morning. Other users also reported similar issues on Uniswap and Balancer, where Twitter user @BrutalTrade found code used to block Ethereum addresses (such as api.balancer.fi/sanctions-check).

Sun was among several wallets dusted (sent small amounts of ETH) by another wallet through Tornado Cash after the U.S. Treasury announced on Aug. 8 that it was banning the mixer for its use by hackers and others in significant exploits like the ones regarding Harmony One and the Nomad bridge.

I’m officially blocked by @AaveAave since someone sent 0.1 eth randomly from @TornadoCash to me. @StaniKulechov pic.twitter.com/tNXNLNYZha
— H.E. Justin Sun🌞🇬🇩 (@justinsuntron) August 13, 2022

@sassal0x, the founder of The Daily Gwei and EthHub who has more than 217,000 Twitter followers, was also blocked on Aave, for about seven hours after tweeting about the issue. The code prevented users from accessing the front-end of the DeFi platform's website, but blocked users could still interact directly with the protocols.

“I didn't contact the Aave team and ask them to unblock me — all I did was put out my original tweet as a social signal to make people aware that this was happening,” he tweeted. “I believe the unblock applies to everyone that was dusted with 0.1 ETH from TC the other day.”

Marc Zeller, the head of developers relations at Aave, updated users about the issue Saturday, saying the “frontend blocks removed as was (way) more severe than intented (sic).

“Likely y’all anon can freely use the app now,” he said. “More official comm soon.”

The website blocks come a day after a Tornado Cash developer, Alexey Pertsev, was arrested in Amsterdam for "concealing criminal financial flows and facilitating money laundering" through Tornado Cash.

On Aug. 8, right after the Treasury announced its ban, the Github account for Tornado Cash developer Roman Semenov was also suspended. The Treasury's Office of Foreign Assets Control says U.S. citizens can be held civilly liable "without having knowledge or reason to know it was engaging in such a violation" by interacting with Tornado Cash. Those who receive cryptocurrency from the blocked wallets must report the transactions to OFAC "within 10 business days," according to OFAC.

Author Bio

TD Marquis

A veteran journalist and editor with more than a decade's worth of experience, TD helped a small community newspaper in Vermont win a New England Newspaper Association Right to Know Award in 2014. TD helped compile five years' worth of invoices to uncover a long-established practice of small-town government officials paying themselves six figures to do small jobs around town. TD discovered NFTs with Top Shot in 2021 and his first NFTs on ETH were saving two Mooncats. He is now the proud owner of Rowhome #61 and 1,300 other NFTs of questionable value. He also sent 4 ETH to a fake Mekaverse site and wants Lucky Trader readers to avoid the same fate.

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