Uniswap is blocking crypto addresses related to crypto heists or sanctions

Decentralized exchange Uniswap has blocked 253 crypto addresses, data leaked on GitHub revealed. It was the first time Uniswap has shared details on this matter, adding further information on its methodology.

Over the four months of working with blockchain analytics firm TRM Labs, Uniswap has blocked 253 crypto addresses. It was the first time Uniswap had revealed data on wallet blacklisting.

According to Yearn Finance core developer Banteg, the data was published on GitHub by Uniswap software engineer Jordan Frankfurt. Mostly, these addresses were blocked because of connections with stolen funds or crypto mixers like Tornado Cash, recently sanctioned by the US Treasury.

Uniswap is based on three core things: code running on the blockchain that anyone can interact with, a front-end website that provides one way for users to interact with the code, and a US-based company that develops the protocol and runs the front-end website.

However, Uniswap’s blocking crypto addresses is acting at the frontend level. That means the protocol can still be used by all wallets on alternative hosted websites.

In April, Uniswap partnered with TRM Labs to block some wallets for illegal activity. When someone interacts with the Uniswap website, their address is sent to TRM Labs, which will assign it a risk level. It’s up to Uniswap to decide what risk levels it’s comfortable with.

In Frankfurt’s words, Uniswap initially blocked addresses that were indirectly related to sanctioned addresses but has since scaled that back. Now it only blocks addresses that were sanctioned or have directly received hacked or stolen funds.

TRM Labs checks the addresses for seven categories of illegal activity, as the chart shared on GitHub depicts. The main four that are commonly flagged are stolen funds, funds from a transaction mixer, sanctioned addresses, and funds from a known scam. The remaining categories are child sexual abuse material, funds from known hacker groups, and funds used for terrorist financing.

Per Banteg, 30 addresses were associated with ENS names, which are used to make it easier to send crypto payments to those wallets. Thus, Banteg suggested most of them were probably legitimate users.