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Apparently, all it takes to get somebody blocked on Aave is to ship that particular person some Ethereum from Tornado Cash. After all, that is precisely what has simply transpired with Justin Sun, the CEO of the favored blockchain-based OS, TRON.
I’m formally blocked by @AaveAave since somebody despatched 0.1 eth randomly from @TornadoCash to me. @StaniKulechov pic.twitter.com/tNXNLNYZha
— H.E. Justin Sun🌞🇬🇩 (@justinsuntron) August 13, 2022
In a tweet posted moments in the past, Sun has introduced that his Aave deal with has now been blocked after somebody randomly gifted him 0.1 Ethereum from Tornado Cash.
As a refresher, Aave is a decentralized lending protocol that enables customers the flexibility to lend or borrow cryptocurrencies. Here, customers deposit digital belongings into designated liquidity swimming pools from which funds are lent out, offering liquidity suppliers a good-looking yield on their contributions based mostly on the quantum of borrowing that’s going down on the platform at a given time. Aave loans are sometimes over-collateralized.
Tornado Cash is a blockchain protocol that enables customers the ability of sending and receiving cryptocurrencies anonymously. This is completed by mixing Ethereum cash with different tokens in order to render the origin of those transactions virtually untraceable.
So why is Aave imposing sweeping bans on any transaction associated to Tornado Cash? Well, the protocol was not too long ago sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), citing its use by the North Korean hacker group Lazarus. Tornado Cash was additionally allegedly used to launder $103.8 million because of Harmony Bridge and Nomad Token Bridge hacks.
After Tornado Cash was sanctioned by OFAC, the Discord server of the protocol’s group, in addition to the native web site, was taken offline amid experiences that the lead developer has been arrested within the Netherlands.
On the again of those developments, TORN – an ERC-20 token that serves because the native coin within the Tornado Cash ecosystem – has seen its worth collapse. In truth, the coin’s worth is down one other 14 p.c over the previous 24 hours alone. The coin is presently buying and selling at $12.30. For reference, TORN was buying and selling on the $28 worth deal with only a week again.
This brings us to the crux of the matter. A blanket ban by Aave on something associated to Tornado Cash reeks of high-handedness, significantly as this coverage can find yourself hurting intermediaries that had nothing to do with the continuing Tornado Cash mess. Such high-handedness can rock the arrogance in the whole crypto sphere.
We will update this publish if we hear extra from Aave on its coverage associated to transfers emanating from Tornado Cash.