In light of sanctions on Tornado Cash, centralized entities have been taking further steps to make sure they comply with regulations.

Unfortunately, this has expanded beyond the popular crypto mixer, which could have dire implications.

Aztec Connect, an Ethereum layer 2 scaling solution that doubles as a privacy platform, has unfortunately been caught in the mix.

Recently, FTX, a leading centralized exchange platform, froze a user account which sent coins to the network.

According to the platform, Aztec Network was a high-risk activity, and has been prohibited by FTX.

Public Backlash

This announcement was not released without criticism.

Crypto Twitter has taken to lashing out against both FTX and Sam Bankman-Fried, their founder and CEO.

However, bigger implications are at play.

Should FTX and other centralized entities continue to be shackled by regulators, other cryptocurrencies and platforms could be placed on the blacklist as well.

This could include privacy tokens such as Monero and Zcash, and possibly platforms that enable privacy networks such as Kadena in the future.

Should regulators continue to clamp down on cryptocurrency, we may even see the fall of some DeFi protocols or tokenized stocks.

Also Read: Tornado Cash Sanctioned By U.S. Treasury After $7B Laundered

[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]

Featured Image Credit: Web Coin Market