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According to a recently published report, decentralized exchange (dex) Uniswap has blocked approximately 253 cryptocurrency addresses allegedly linked to crimes or government sanctions. The information was discovered by software developer Banteg who analyzed and stored the shared logs from Uniswap’s server.
On August 19, software developer and Yearn Finance contributor Banteg published a Twitter thread which claims dex Uniswap blocks 253 crypto addresses. “Uniswap has provided an unusual level of transparency,” Banteg said regarding “front-end censorship via TRM Labs.” Uniswap partnered with TRM Labs in mid-April, and the firm blacklists crypto addresses that may be associated with sanctions and cryptocrime.
The same month, reports appeared indicating that a few innocent Uniswap users were touched of TRM Labs gated interfaces. At the time, no one was sure exactly how many crypto addresses were blacklisted by Uniswap’s TRM Labs gated interface. Banteg says it is 253 addresses and 30 addresses are ENS domain names. The developer also noted that there are seven different types of risk factor categories and two levels of risk.
“Both ownership and being a counterparty to a ‘bad’ address are checked and can contribute to blocking,” Banteg wrote. According to Banteg, the data was “not intended to be public,” but the developer noted that people could still have an “exclusive look at the very first [TRM Labs] leak, courtesy of Uniswap.”
The news follows lately US government ban on Tornado Cash, the ethereum mixing protocol that leverages Coinjoin and ZKsnark technology. After Tornado Cash was banned it was an open source developer arrestedThe Github code was deletedTornado Cash Github codebase contributors were suspended and the project’s Discord server was deleted.
However, the nonprofit organization that focuses on policy issues facing cryptoassets, Coin Center, believes that the US Treasury Department’s Office of Foreign Assets Control (OFAC) “exceeded its legal authority.” Coin Center is researching the legality of the Tornado Cash ban and plans to “engage” with OFAC to discuss the matter.
While Uniswap has updated its TRM Labs gated interface, there are likely many more crypto companies and decentralized finance protocols (defi) following the same measures. For example, August 8, Banteg revealed that Center Consortium, the stablecoin issuer operated by Circle Financial and Coinbase Global, blacklisted 75,000 USDC belonging to Tornado Cash users.
“I think this is the first case when a pool has been frozen and not an individual account,” Banteg said at the time.
The issues surrounding Tornado Cash and the precautions taken by defi teams like Uniswap reveal the underlying weakness of so-called ‘decentralized finance’ protocols and whether or not they are truly decentralized.
Even before Tornado Cash was banned by the US government, Tornado Cash developers blacklisted an OFAC-listed ethereum address using a Chainalysis oracle contract. Also, in July 2021, users criticized Uniswap for blocking over 100 tokens from the main interface.
In both of these cases, crypto users discussed how they could easily pressing agent Tornado Cash code or Uniswap smart contracts and mirror pages to circumvent this type of restriction. The fact is that Uniswap is a company registered in the US and the front end, or website, is owned by the US entity. In time, people will perhaps clarify that defi web portals are not decentralized, and the only thing that can be classified as such will be smart contracts and code.
What do you think about dex Uniswap blocking 253 crypto addresses? Let us know what you think about this topic in the comments section below.
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