According to reports, FTX has started barring accounts that have sent money over the private layer-2 chain zk.money, which is made available by the Aztec Network on Ethereum.
On Thursday, reports of FTX transactions being denied started to surface on Twitter, along with commentary on the reasons behind FTX and claims that zk.money is not a mixer.
Twitter users also pointed out that blocking transactions linked to the protocol might mean a ban with broad repercussions, such as the penalties Tornado Cash users were subjected to by the US Treasury Department. On August 8, the American organization added more than 40 USDC and ETH addresses to the OFAC List of Specially Designated Nationals.
Days before FTX’s alleged action against the network, Aztec Network CEO Zac Williamson posted a lengthy thread on Twitter on Monday discussing the circumstances behind Tornado Cash. In Web3, there is room for regulation. The network level is not where it is. The application level, according to Williamson, who also said:
“The depressing thing is that we’ve been through this already with the World Wide Web. We don’t arrest internet service providers for the data in their cables. We don’t arrest DNS providers for signing illegal traffic.”
We’ve already gone through this with the World Wide Web, which is depressing. We don’t make warrants for internet service providers’ cables’ data. When DNS providers sign traffic that is illegal, we don’t arrest them.
Launched in March 2021, Zk.money The Aztec Connect software development kit from the Aztec Network identifies itself as the “private DeFi yield aggregator.”
In contrast, Aztec Connect “operates like a VPN: by using a proxy created by the roll-up contract of Aztec.” The Aztec Network revealed on Thursday that DEX Balancer Labs was getting ready to fund Aztec Connect.
