DeFi Protocol Aave Bans Justin Sun After He Randomly Received 0.1 ETH from Tornado Cash

The wallet address of Justin Sun (founder and CEO of Tron Blockchain Project) was banned by Decentralized Protocol Aave for unknowingly interfacing with the sanctioned Ethereum-based cryptocurrency mixer Tornado Cash.

Justin Sun confirmed that Ethereum-based DeFi protocol Aave had blocked his address on Saturday after an unknown sender sent him 0.1 Ethereum from Tornado Cash.

Since someone sent me 0.1 eth randomly via @TornadoCash, I am officially blocked by @AaveAave @StaniKulechov

— H.E. Justin Sun

(@justinsuntron August 13, 2022

U.S. Sanctions Tornado Cash

Remember that the United States Department of the Treasury’s Office of Foreign Assets Control sanctioned Tornado Cash recently for helping bad actors to launder crime proceeds, even those against victims in the U.S.

These sanctions were imposed after the crypto mixer was used as a launderer hub by hackers who have taken at least $1.4 Billion from DeFi bridges and other crypto hacks.

Unknown user sent 0.1 Ethereum from a Tornado Cash blacklisted address to large crypto-related companies, celebrities and traders in an apparent attempt to mock the U.S Treasury.

PeckShield, a blockchain security firm, said that more than 600 addresses have received 0.1 Ethereum from Tornado Cash. This list includes Binance and FTX, Beeple as well as Coinbase’s Brian Armstrong, Justin Sun and sifu.eth.

What is decentralization in the Mud?

Surprisingly at least five decentralized protocols including Uniswap and Balancer have blocked people who received the ETH airdrop randomly from the blacklisted wallet. This has caused crypto users to question the notion of decentralization.

Defi. It is so decentralized that organizations block users from accessing wallets that have received payments from tornado cash. In a world that is ruled by elites, decentralization is not possible. This is just the beginning. These protocols will all be revealed one at a time. #TornadoCash

— CRYPTONYMOUS August 13, 2022 (@_Cryptonymous__).

If crypto prices crash, the ban could cause liquidity problems. Because DeFi users who are blocked with active loans will not be able access their accounts to add liquidity or manage their Loan-to–value (LTV), to avoid forced liquidation.

1. Identify all major loans @AaveAave to plan liquidation cascade 2. Send Ethereum from @TornadoCash all wallets that have major loans All wallets should be blocked by AAVE Shorten ETH 5. Initiate ETH dump 6. You can watch the liquidation cascade, and no one can stop it. It’s all about it

alex and Omega (@alexandomega) August 13, 2022

Some believe the ban is on the front-end. Users can still access their accounts via a command line interface (CLI), or forking the project to build their own front-end interface. This is still beyond the technical knowledge of most DeFi users.

ave Responses

The Aave team mentioned in a Twitter thread that they had recently integrated TRM’s API to the platform’s IPFS front end. This is why some users were having trouble accessing the Aave application.

Protocol states that the integration allows for the identification of wallets that have interacted with Tornado Cash contracts following the sanctions. The API was making incorrect calls and blocking wallets that received ETH without consent. Justin Sun and other users were able to regain access to their accounts after the Aave team resolved the problem.

CryptoPotato’s first post, DeFi Protocol Bans Justin Sun after he randomly received 0.1 Ethereum from Tornado Cash, appeared first on CryptoPotato.

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