Reports Say FTX Warns Customers Not To Interact With Aztec Network, CEO Sam Bankman-Fried Responds – Privacy Bitcoin News

According to reports on social media, a number of users have complained that FTX has blocked a transaction that was associated with Aztec Network’s zkmoney privacy technology. Following the allegations, FTX CEO Sam Bankman-Fried explained that transactions are monitored for AML compliance, but that “doesn’t mean any accounts were frozen.”

Journalist Wu Blockchain says an FTX user’s account was frozen after the user traded Aztec Network’s privacy-enhancing ZK rollups

On August 18, China-based journalist, Colin Wu ‘Blockchain’ published a tweet saying that a user trading with Aztec Network’s zkmoney technology had his account frozen. Aztec Network is a privacy and scaling network, and like Optimism and Arbitrum, it uses ZK rollups, but Aztec Network’s zkmoney technology is privacy-enhancing. Aztec’s technology uses a zk-SNARK scheme called “Plonk”, a general zero-knowledge secure mechanism.

So while the average Ethereum network fee is 0.0014 ether or $2.29 using today’s ETH rates, sending ether via the Aztec Network will only cost $0.40 per transfer. “Recently FTX froze a user account that was sending coins to [Aztec Network’s] zkmoney,” Wu Blockchain tweeted on Thursday. “According to FTX, Aztec Connect – Aztec network / zk money has been identified as a mixing service, which is a high-risk activity prohibited by FTX.”

The journalist added:

FTX said that industry-leading third-party transaction monitoring tools ensure that users do not interact with high-risk addresses, it is recommended not to use the mixing service in the future, otherwise it may put your FTX account at risk.

FTX CEO Sam Bankman-Fried Responds, Aztec Network Insists ‘Privacy Is Legitimate’

Following the tweet, FTX CEO Sam Bankman-Fried black to Wu Blockchain’s statement, explaining that while FTX monitors transactions, it does not mean the exchange has frozen any accounts. “To be clear – this is being garbled,” Bankman-Fried said. “We continuously monitor transactions for AML compliance, and do enhanced due diligence on certain transactions, but that does not mean any accounts were frozen.” Plus the official Aztec Network Twitter page tweeted about the problem.

“We are aware of reports that FTX is warning users not to interact with Aztec,” the team so. “As a result, we want to emphasize our current and ongoing risk mitigation framework: 1) Implement practical deterrents 2) Measure their effectiveness – Privacy is legitimate.” Aztec network continued:

We want to start by repeating our mission – to empower individuals with privacy in the chain. Our conviction is that privacy is a fundamental precursor to – discretion, security, [and] Creativity — In other words, normality. As a result, our approach has always been one of practical deterrence: ensuring users have access to on-chain privacy while deterring money laundering and illegal activity.

The Aztec Network news follows the ongoing complaints that Tornado Cash is being banned by the US government. Furthermore, reports show the decentralized exchange (dex) platform Uniswap has blocked 253 Ethereum-based addresses from the front end using TRM Labs technology. Furthermore, 12 days ago, the software developer Banteg reported that the Center Consortium blacklisted 75,000 USDC linked to the Tornado Cash pool.

What do you think of the reports claiming that FTX has frozen an account of someone using the Aztec Network? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.