DeFi lending protocol Aave Protocol said the TRM API on its app was responsible for blocking addresses that received ETH from unknown sources through Tornado Cash.
In a Twitter thread on Saturday, the protocol claims that it receives blockchain intelligence from TRM Labs and has integrated TRM API into its frontend to ensure a safe and secure system.
According to the DeFi protocol, “TRM API risk parameters identify all wallets that have interacted with Tornado Cash contracts” and in compliance with OFAC sanctions, block all addresses that interacted post sanction.
This explains why several addresses entered the blocklist, including the ones “sent “dusted” ETH by third parties interacting with the Tornado Cash contracts without consent.”
It added that it has addressed the issue and will “continue to evaluate responsible and reasonable risk mitigation given the circumstances.”
Additionally, the protocol reiterated that it remains decentralized and governed by a DAO, urging its “community to remain engaged and actively fight for open and fair finance.”
Justin Sun Regains Access to Aave
Meanwhile, Justin Sun, whose Aave account was one of those blocked for receiving $0.1 ETH through Tornado Cash, has confirmed that the account is active again.
Justin Sun had earlier revealed that he was unable to interact with Aave on August 13. The Tron founder said that the decentralized protocol had blocked his wallet because of a Tornado Cash-linked transaction.
Peckshield later revealed that over 600 wallets were affected by the ban.
Available information also showed that other decentralized protocols like Uniswap, Balancer, dYdX, and others stopped users because of the OFAC sanction on Tornado Cash.
Crypto Community Questions DeFi Protocols “Decentralization”
Some DeFi protocols’ decision to screen and block addresses that interacted with Tornado cash has led to questions about their “decentralization.”
In Aave’s case, the community questioned the logic of blocking an average user’s access to the front end when malicious players could still choose to directly interact with the contract.
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Source: https://beincrypto.com/aave-responds-to-blocking-addresses-over-tornado-cash-clampdown/