Breaking: DeFi Is In Big Trouble With Regulatory Authorities Breathing Down Their Neck, Tornado Cash Sanctioned

DeFi is in big trouble with regulatory authorities breathing down their neck. U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned crypto mixer Tornado Cash some days back. Twiter users have revealed that DeFi lending giant Aave is also blocking addresses linked to Tornado Cash.

Accounts which received funds from Tornado Cash has been sanctioned by a number of DeFi platforms including Uniswap, Aave, and Balancer. The blocked accounts also include well-known ENS addresses have reportedly received 0.1 ETH from sanctioned addresses.

Aave Sanctions Addresses Which Received Funds From Tornado Cash

Wallet addresses of prominent persons including Sassal0x, Tron’s founder Justin Sun, and Shixing Mao, co-founder of Cobo crypto custodian were blocked by Aave.

As per information received from PeckShieldAlert addresses which received 0.1 ETH from Tornado Cash 0.1 ETH contract were blocked and are in excess of 600. The addresses include a number of well-known personalities.

Experts contend that DeFi is in big trouble and major DeFi platforms have blocked addresses. Some platforms like Discord and Github have halted providing services to the crypto mixer. DeFi platforms including Aave, Uniswap, Balancer, dYdX, Alchemy, and Infura blocked addresses.

The very purpose of decentralization is halted due to the lack of regulation of the blockchain companies leading to sharing data or following laws without regulation. One of the software developers of Tornado Cash has been arrested in Netherlands and the crypto community has decried his arrest. They contended that developing software from open sources cannot be termed as criminal.

However, users can access the wallet by using an alternative front end since the dApps have blocked the front end only. It is still not clear if the DeFi platform will block the addresses at the smart contract level. Companies are banning Tornado Cash, especially after the U.S. Treasury Department’s Office of Foreign Assets Control added it to its Specially Designated National list.