Uniswap Labs Has Begun Blocking Certain Crypto Wallet Addresses

2022-05-25, 07:06

Uniswap Lab has an exchange platform for crypto holders to swap and make transactions.

Uniswap Lab also invests in the development of Web3 applications and their developers.

Uniswap Lab’s exchange platform is built on the Ethereum blockchain.

Uniswap Lab has a decentralized exchange platform that uses smart contracts (Solidity) for its operations.

Uniswap has its governance token UNI and has over $3 billion worth of cryptocurrencies in its protocol.

Uniswap will partner with TRM Lab, a blockchain analysis firm, to block fraudulent crypto wallets.

The role of the TRM lab will be to flag the crypto wallets that have previously been linked with illegal activities.

These illegal activities include unauthorized access to wallets, stealing funds, terrorism financing, ransomware, money laundering, etc.

Tornado Cash and Chain Analysis have launched similar tools to reduce fraudulent activities in the crypto space.

The decentralized and open-source nature of the cryptocurrency makes it easy for individuals or groups to carry out illegal activities.

These activities could include hacking wallets, stealing funds, terrorism financing, ransomware, money laundering, etc.

In recent times, many people are now engaging in these activities, and the attack on people’s wallets and the crypto platforms is increasing.

On this note, Uniswap announced that it would begin to block crypto wallets involved in any illegal activities or dealings.

In this article, we shall identify the basic functions of Uniswap, how Uniswap intends to tackle these illegal accounts, and the steps/ partnerships to reduce the activities.

Uniswap Lab Venture

Uniswap Labs is a decentralized exchange venture. It invests in teams in different stages of Web3 stack development, and the investment covers infrastructure, applications, and developer tools.

One of the subsidiaries of Uniswap lab is the Uniswap exchange protocol. The Uniswap protocol is a cryptocurrency exchange, and it deploys decentralized network mechanisms.

The Uniswap exchange protocol is a platform for automated transactions between crypto tokens on the Ethereum blockchain. Uniswap exchange protocols use smart contracts (Solidity) for their operations.

Uniswap is quite different from other cryptocurrency exchange platforms because it is not owned or operated by a single entity. It also deploys the automated liquidity protocol as its trading model.

The Uniswap platform was developed in 2018 on the Ethereum blockchain. The Uniswap exchange platform is compatible with all ERC-20-powered tokens and wallet services such as MetaMask and MyEtherWallet.

The governance protocol of Uniswap is flexible, and it allows users to list their crypto tokens on the exchange platform for free. It is also an open-sourced platform that allows developers to copy their code and create a replica.

Uniswap is a Decentralised exchange platform that does not take ownership of its users’ private keys. So users can control and manage their funds because they have their blockchain private key.

You also do not have to worry about losing the assets saved in your wallet even if the exchange platform is hacked. If you disclose your private keys to others, you can only lose your asset.

Uniswap has its governance token, UNI. It has over $3 billion worth of cryptocurrencies in its protocol.

How Uniswap Plans To Block Illegal Accounts

Image: BullFrag

Uniswap labs, the developer of the Uniswap exchange protocol, is partnering with TRM Lab, a blockchain analysis firm. The partnership will ensure the blocking of crypto wallet addresses that are liable for illegal activities via the app's front end.

TRM Labs will be in charge of flagging the crypto wallets previously linked with illegal activities. Uniswap will then block those wallets from its exchange platform and services.

In a Frequently asked question (FAQ) section of the Uniswap's website, they made it known that the move is “a policy to prevent people engaged in Illegal behavior from using our (Uniswap’s) app.

The partnership between Uniswap and TRM Labs is to provide a safe, transparent, and strong financial infrastructure for its users worldwide.

TRM Labs is an independent firm that determines the risk associated with wallet addresses. Whichever wallet it flags as fraudulent is solely its decision after a thorough check. TRM Labs is independent in its operation and not under the control of Uniswap Lab.

The launch of this blocking plan is not the first of its kind. The DeFi sector is now witnessing the block of crypto wallets perceived as fraudulent.

Recently, Tornado Cash, an Ethereum mixer, started blocking crypto wallets that have been sanctioned and flagged by the Office of Foreign Assets Control (OFAC). OFAC is an enforcement agency of the United States treasury department.

Tornado Cash uses Chainanalysis’ on-chain oracle and smart contract to detect and block crypto addresses that have been (previously) sanctioned by OFAC.

The move by Uniswap to block these accounts is at the front-end level. Therefore, all wallets can still deploy the protocol on alternative hosted websites.

In a similar move, Chain analysis, a blockchain data analytics firm, launched two free screening tools to ensure appropriate sanctions are deployed in the crypto industry. These tools will include tracking software for screening wallets involved in illegal activities or sanctioned in the past.

Conclusion

The crypto industry is deploying measures to reduce how hackers divert funds during exchanges. There are also measures to ensure illegal crypto wallets are being rid of the crypto market.

One of those companies that have taken the right step to launch the attack on these fraudulent wallets is the Uniswap Lab. It is partnering with TRM Lab to detect suspicious accounts and block them easily.

We are optimistic that more tools and plans will be launched to eliminate these faceless, fraudulent accounts and reduce criminal activities in the crypto market to the barest minimum.

Author: Valentine A., Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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