dYdX is committed to providing the best product to its users, as well as providing a product that can be reliably used by the global community. As a result, we have long utilized compliance vendors to scan and flag accounts on dYdX’s hosted matching engine that have funds associated with vendors potentially dealing in ransomware, malware, child sex abuse material, known criminals, and sanctions lists published by the global community, such as the UN, EU, UK, US, JP, etc.
dYdX recently became aware of a significant increase in accounts flagged by our compliance provider that were subsequently blocked by dYdX. Many accounts were blocked because a certain portion of the wallet’s funds (in many cases, even immaterial amounts) were associated at some time with Tornado Cash, which was recently added to the sanctions list by the U.S. Treasury’s OFAC. This sudden influx of flags affected many account holders that never directly engaged with Tornado Cash, and often such users do not realize the origin of the funds transferred to them during various transactions prior to interacting with our platform, but we must nevertheless maintain certain restrictions.
We have made adjustments, within the limits of our compliance policies, that have unbanned certain accounts and we will continue to make efforts to limit flagging and track this issue moving forward. If you believe your account is still incorrectly blocked, please reach out to firstname.lastname@example.org.
As a reminder, dYdX Trading does not have the ability to seize customer funds. All customers that deposit to the protocol can always withdraw and will always maintain custody of their funds. dYdX Trading does have the ability to put users’ accounts in close-only mode on our hosted matching engine.
We apologize for any inconvenience and appreciate your patience as we navigate this unprecedented event.
dYdX is the developer of a leading decentralized exchange on a mission to build open, secure, and powerful financial products. dYdX runs on audited smart contracts on Ethereum, which eliminates the need to trust a central exchange while trading. We combine the security and transparency of a decentralized exchange, with the speed and usability of a centralized exchange.