- FTX has frozen a user’s account due to a transaction with zkmoney Aztec Network identified as a mixing service.
- FTX has banned a high-risk mixing service similar to Tornado Cash, which was recently censored by the US Department of the Treasury.
- The FTX exchange token, FTT, remains indecisive after losing almost 14% over the past week.
The FTX exchange recently froze a user’s account due to a transaction in which the user was interacting with zkmoney Aztec Network. FTX follows in the footsteps of Uniswap by identifying and blocking high-risk protocols such as Aztec.
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FTX freezes user account after transaction with zkmoney Aztec
The FTX exchange has dealt a blow to users interacting with high-risk activity protocols such as Aztec. Colin Wu, a Chinese journalist, reported that FTX will block users who send money using this protocol. Aztec Protocol is a privacy-focused zk-fold for Ethereum, bringing privacy and cost savings to the ecosystem.
FTX’s motive for freezing user accounts is that the Aztec protocol is associated with high-risk activity similar to Tornado Cash. The latter has been banned by the US Treasury Department due to the risk it poses to national security.
Because zk money, the second layer protocol on the Ethereum blockchain, secures the tokens with a zero-knowledge proof cryptocurrency (ZKPC), the transaction is no longer public information.
Aztec has reached out to users and acknowledged that FTX is blocking user accounts when using the protocol. Aztec has defended privacy and said it is already taking active steps to ensure that “potential illegal users” do not use its services. This makes it easier for Ethereum traders to interact privately with DeFi applications. Aztec says it continues to protect user privacy despite FTX’s decision to freeze user accounts.
User security is a key privacy benefit.
If our network is being used to harm users, our mission has failed.
Therefore, we are working with partners to identify those using the stolen funds and expose them using publicly available information *outside* the Aztec system.
— Aztec (@aztecnetwork) August 19, 2022
The Aztec assured the merchants that,
We will not be passive to stop illegal behavior. [Aztec is] continue communication with global regulators, centralized exchange organizations and consumers.
FTT price stays the same, doubtful traders?
The price of the FTX FTT exchange token has remained unchanged. Over the past week, FTT has brought about 15% losses to holders. Analysts at Bitpeaks believe that FTT has upside potential, the token could break above the $27 level.
FTT price table