Decentralized exchange Uniswap while collaborating with blockchain analytics company TRM Labs for the past four months, has blacklisted 253 cryptocurrency addresses. It is worth noting that this is the first time Uniswap had made wallet blacklisting data public.
Most of the addresses were blocked as a result of links to stolen funds or firms that mix transactions, including Tornado Cash, which the US Treasury recently sanctioned.
Uniswap vs TRM Labs
Uniswap and TRM Labs teamed up in April. When a user interacts with the Uniswap website, TRM Labs receives their address and assigns it a risk level. Uniswap is in charge of determining what degree of risk it is willing to accept.
According to Frankfurt’s comments on GitHub, the exchange first blocked addresses that indirectly connected to sanctioned addresses, but has recently toned it down. Now, it only blocks sanctioned addresses or that have really received funds that were either stolen or hacked.
A graphic posted on GitHub details the seven types of illicit conduct that TRM Labs looks for while checking addresses. Stolen funds, funds from a transaction mixer, sanctioned addresses, and extra funds from a known fraud are the four main categories that are frequently detected.
The remaining categories include money used to finance terrorism, money from recognized hacking groups, and materials involving child sexual assault.
According to Banteg, in order to make it simpler to deliver cryptocurrency payments to those wallets, 30 of the addresses were linked to ENS names. Banteg believed the majority of them were likely legitimate users.
At the time of writing, there were no formal comments from Frankfurt and Uniswap. Cryptopolitan will update this post should we get a response.
Uniswap is made up of three main components: code that runs on the blockchain and can be seen by anyone; a front-end website that gives users a method to interact with the code; and a US-based company that creates the protocol and manages the front-end website. Crypto addresses are blocked at the front-end level.