Aave, Uniswap, and Balancer, three essential DeFi protocols, reportedly began rejecting wallets that have communicated with Tornado Cash's smart contract on the morning of August 13.
Users of these sites will receive notification that they are unable to connect to the project because their address is associated with "banned activity."
Instead of preventing access to smart contracts, it only serves as a means to control access to the protocols' front-end interface. Many jokingly claimed that there was now a way to prevent other addresses from selling tokens on Ethereum by sending ETH there via Tornado Cash, despite the fact that the project's website was offline.
Tornado Cash incident has raised important questions regarding how the decentralized nature of DeFi initiatives and a country's obligation to follow the law may coexist.
Although some users even changed the ava to the Tornado Cash logo to demonstrate their support for the campaign, the crypto community on Twitter believes that the US has been too aggressive in its prohibition.
The Tornado Cash event has sparked significant debate over how DeFi initiatives' decentralized character and a nation's duty to uphold the law may coexist.
Despite the fact that some users even replaced the ava with the Tornado Cash logo to show their support for the initiative, the crypto community on Twitter thinks that the US has been overly aggressive in its restriction.
Circle frozen the USDC in the Tornado Cash wallet, and the Maker stablecoin project DAI is thinking about delisting the USDC from the list of collateral assets.
The matter became more serious after Dutch law enforcement detained a Tornado Cash developer on August 12. Further confusing the DeFi community is the lack of clarity around whether other programmers or users who have interacted with the crypto "mixer" platform may face legal repercussions.
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