Privacy protocol Aztec reacts to FTX freezing user accounts

FTX asks its users to refrain from using the Aztec mixing service in the future since doing so may jeopardize the FTX account. However, Aztec stated that it does not intend to sacrifice user privacy to prevent the illicit use of its service.

According to reports by numerous FTX users, the cryptocurrency exchange advised users against utilizing Aztec Connect, Aztec Network, and zk.money since they are “high-risk” services.

Aztec Network, a privacy-enhancing smart contract platform on Ethereum, took to Twitter on August 19 to respond to customer complaints that FTX, one of the largest cryptocurrency exchanges in the world, is allegedly “freezing” the accounts of customers who used Aztec’s services.

“We are aware of reports that FTX is warning users not to interact with Aztec,” Aztec Network tweeted. It said that it is already taking active measures to ensure that “would-be illicit users” are not employing its service, which makes it easier for Ethereum traders to interact privately with DeFi applications.

The warning comes on the heels of the US government’s controversial ban on Ethereum mixing service Tornado Cash. Last week, the US Treasury Department sanctioned the protocol and several associated wallet addresses, effectively banning US residents and companies from using the tool. The move has had far-reaching implications for the cryptocurrency industry, and some companies and projects have taken preemptive measures to distance themselves from tools that make it harder to track the source of funds.

Meanwhile, Aztec says it has already implemented changes to deter money laundering, including slowing the rate of deposits and withdrawals and making it easier to identify at-risk addresses. “We will not be passive in stopping illicit behavior,” it tweeted. The project also said via Twitter that it reached out to FTX and is committed to “pursuing conversations with global regulators, centralized exchange entities, and consumers.”

Aztec made clear in its post today that it does not intend to sacrifice user privacy to prevent the illicit use of its service. “User security is a key privacy benefit,” it tweeted. “If our network is used to harm users, we’ve failed our mission.”