SBF's FTX fights crypto privacy breach, wages war against Aztec Protocol

• FTX froze a user’s account due to a transaction to the Aztec Network’s zkmoney, identified as a mixing service. 
• FTX has prohibited the high-risk mixing service, similar to Tornado Cash that the US Treasury recently censored. 
• FTX’s exchange token FTT remains indecisive after yielding nearly 14% losses over the past week. 

FTX exchange recently froze a user’s account due to a transaction where the user interacted with Aztec Network’s zkmoney. FTX is following in Uniswap’s footsteps, identifying and blocking high-risk activity protocols like Aztec. 

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FTX freezes user account after transaction with Aztec’s zkmoney

FTX exchange landed a blow to users interacting with high-risk activity protocols like Aztec. Colin Wu, a Chinese journalist, revealed that FTX is reportedly blocking users sending money through this protocol. Aztec Protocol is a privacy-first zk-rollup on Ethereum, bringing confidentiality and cost savings to the ecosystem. 

FTX’s grounds for freezing user accounts is that Aztec protocol is associated with high-risk activity similar to Tornado Cash. The US Treasury banned the latter for the risk it poses to national security. 

Since zk money, a layer 2 protocol on the Ethereum Blockchain, shields the tokens using zero-knowledge proof cryptography (ZKPC), the transaction is no longer public information. 

Aztec addressed users and acknowledged that FTX is freezing user accounts when they engage with the protocol. Aztec defended privacy and argued that it is already taking active measures to ensure that “would-be illicit users” are not employing its service. This makes it easier for Ethereum traders to interact privately with DeFi applications. Aztec asserts that it continues to defend user privacy, irrespective of FTX’s decision to freeze user accounts. 

Aztec assured traders that,

We will not be passive in stopping illicit behavior. [Aztec is] pursuing conversations with global regulators, centralized exchange entities, and consumers.

FTT price remains unchanged, traders indecisive?

The price of FTX’s exchange token FTT remained unchanged. FTT yielded nearly 15% losses to holders over the past week. Analysts at Bitpeaks believe FTT has bullish potential, the token could climb past the $27 level. 

FTT price chart 

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