SBF’s FTX Fights Crypto Privacy Violations, Wages War Against Aztec Protocol
- FTX froze a user’s account due to a transaction to Aztec Network’s zkmoney, identified as a mixing service.
- FTX has banned the high-risk compounding service, similar to Tornado Cash which was recently censured by the US Treasury Department.
- FTX’s exchange token FTT remains indecisive after posting a nearly 14% loss in the past week.
FTX exchange recently froze a user’s account due to a transaction where the user interacted with Aztec Network’s zkmoney. FTX follows in Uniswap’s footsteps, identifying and blocking high-risk activity protocols such as Aztec.
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FTX freezes user account after transaction with Aztecs zkmoney
The FTX exchange took a hit for users who interacted with high-risk activity protocols such as Aztec. Colin Wu, a Chinese journalist, revealed that FTX is allegedly blocking users who send money through this protocol. Aztec Protocol is a privacy-first zk rollup on Ethereum that brings confidentiality and cost savings to the ecosystem.
FTX’s rationale for freezing user accounts is that the Aztec protocol is associated with high-risk activity similar to Tornado Cash. The latter was banned by the US Treasury Department due to the risk it poses to national security.
Since zk money, a layer 2 protocol on the Ethereum Blockchain protects tokens using a zero knowledge secure cryptography (ZKPC), the transaction is no longer public information.
Aztec reached out to users and acknowledged that FTX freezes user accounts when they engage with the protocol. Aztec defended its privacy, claiming it already takes active measures to ensure “would-be illegal users” do not use its service. This makes it easier for Ethereum traders to interact privately with DeFi applications. Aztec maintains that it continues to defend users’ privacy, regardless of FTX’s decision to freeze user accounts.
User security is an important privacy benefit.
If our network is used to harm users, we have failed in our mission.
Therefore, we work with partners to identify those using stolen funds and expose them using publicly available information *outside* of the Aztec system.
— Aztec (@aztecnetwork) 19 August 2022
Aztec assured traders that,
We will not be passive when it comes to stopping illegal behavior. [Aztec is] pursue conversations with global regulators, centralized exchange entities and consumers.
FTT Price Remains Unchanged, Traders Indecisive?
The price of FTX’s exchange token FTT remained unchanged. FTT gave almost 15% loss to its holders in the last week. Analysts at Bitpeaks believe that FTT has bullish potential, that the token could climb past the $27 level.
FTT price chart
