FTX users complain about fund freezes after interacting with privacy protocol Aztec Network FTX users complain about fund freezes after interacting with privacy protocol Aztec Network
Privacy protocols might be under increased scrutiny, as some users have reported that FTX allegedly froze funds of those who interacted with the Aztec Network.
2 min read
Updated: Aug. 19, 2022 at 7:44 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
FTX has allegedly warned users against interacting with high-risk services as complaints surfaced that the exchange is blocking accounts that interacted with zk money on the Aztec network.
Chinese journalist Colin Wu reported Aug. 19 that a user’s account was frozen for making a transfer to his zk money account.
Recently, FTX froze a user account who sent coins to @aztecnetwork ‘s zkmoney. 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.
— Wu Blockchain (@WuBlockchain) August 19, 2022
Some users took to Twitter to share their experiences. A Twitter user earlier shared some screenshots on Aug. 14, about a series of questions that FTX customer care asked when attempting to make deposits to the account.
Another user also complained about being prohibited from making withdrawals after some funds were frozen.
FTX allegedly said that addresses associated with the protocol are “high-risk” and are prohibited on the exchange. Users are advised to desist from using mixing services as it could endanger their accounts.
Aztec is a privacy protocol, not a mixer
Some users noted that Aztec Network is a privacy solution and should not be treated on the same terms as mixing services like Tornado Cash.
Can’t believe this, so anyone who interacts with a privacy chain is frozen from now on!
You know what else is privacy preserving… cold hard cash
What’s next, they start freezing those users for being involved with mixers?
— jaimin.eth | jaimin.sol (@Jaimin___Patel) August 19, 2022
zk money is a layer-2 privacy solution built on the Aztec network which enables users to perform transactions without compromising their privacy. Transaction data can be shielded from the public but the owner can choose who and what to share if the need be.
A user expressed pessimism that if freezing sprees against privacy protocols are unchecked, zk rollup solutions which are built to preserve privacy may have met an early end.
zk rollups are dead already
— 🔑 弐九84 Ø (@ghost_xnft) August 19, 2022
More concern for privacy protocols
The United States’ sanction against Tornado Cash and the arrest of a developer in the Netherlands, has brought a threat to the future of privacy-focused solutions like Monerao.
That notwithstanding, Monero still completed its hard fork on Aug. 13. The upgrade helped improve the security and privacy features of the network.
As fears about the safety of privacy protocol developers mount, Monero developer Justin Berman reiterated his commitment to keep building a solution that will give users the privacy they deserve.
I work on @monero to help make money that’s easy to use without revealing your net worth + salary + entire spending history to the world when you use it.
Completely normal thing.
I’m not going anonymous to do something completely normal.
— Justin Berman (@justinberman95) August 15, 2022
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Author 
Christian Nwobodo
Christian is a crypto-curious nerd who loves to investigate how protocols work under the hood. Christian is interested in DeFi protocol research, token economics, and on-chain analytics.
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Monero is an open-source cryptocurrency that focuses on privacy, decentralization, and scalability..
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alexey Pertsev is a software developer who works on security assessments of various projects and systems: banks, social networks, ICO, etc.
