Crypto Privacy Protocol Will Tighten Limits On Individual Depositors
In an effort to deter bad actors, Aztec, a crypto privacy protocol, will tighten limits on the amount of money individual users can funnel through its platform.
The move comes amid mounting pressure from regulators and, allegedly, popular crypto exchange FTX.
FTX has warned its users to avoid Aztec, which it has allegedly labeled a Tornado Cash-style “mixing service,” crypto reporter Colin Wu reported Thursday night.
“To be clear–this is getting garbled,” FTX CEO Sam Bankman-Fried said in a tweet Friday. “We are constantly monitoring transactions for AML compliance, and do enhanced due diligence on certain transactions, but that does not mean that any accounts were frozen.”
FTX is yet to respond to multiple requests for comment from The Defiant. Aztec said it had contacted FTX “to understand their stance.”
Tornado Sanctions Test Resilience of DeFi Privacy Community
Privacy Mavens Tout ZK-Proofs as Solution for Users and States
Aztec, which allows users to transfer digital assets and interact with DeFi protocols without revealing their Ethereum addresses, already sports a per-transaction deposit limit of 5 ETH ($8,500) or 10,000 DAI, a dollar-pegged stablecoin. Those limits make it “ridiculously onerous for a large hacker to move funds through the system in a way that’s untraceable,” Jon Wu, Aztec’s head of growth, said in a Twitter Space last week.
Over the next several weeks, Aztec will make it even harder for cybercriminals to misuse its privacy-enhancing technology, the company announced Friday.
Incoming changes include system-wide daily asset deposit caps, IP-specific deposit rate-limiting and single-address pending deposit caps.
Those changes will “practically eliminate the ability of bad actors to move stolen funds through Aztec,” the company said.
Aztec also announced that it was using publicly available information from outside its system to “identify and unmask” users who transfer stolen money.
“To would-be illicit users of our network, we want to send a clear message,” Aztec said. “We will not be passive in stopping illicit behavior.”
UPDATED on 8/19 @ 9pm ET to include the response from Sam Bankman-Fried