Crypto exchange dYdX announced blocking user accounts that interacted with transaction mixer Tornado Cash after the US Treasury imposed sanctions against the program.
dYdX released a blog post saying they have made changes within the limits of compliance rules that have unbanned certain addresses. The team said they will continue to make attempts to limit flagging and follow this issue moving forward.
dYdX said that many accounts were banned as some wallets were related at some time with Tornado Cash. The platform mentioned that the sudden ban also affected account holders that never used Tornado directly, and they often didn't realize the origin of the cryptos sent to them during different transactions before interacting with the exchange. However, dYdX noted they need to maintain certain restrictions.
The team was reminded that the platform doesn't have the ability to seize user funds. They have the ability to put users' accounts in close-only mode.