Cryptocurrency

Ethereum may now be more vulnerable to censorship – Blockchain Analyst

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Upgrading Ethereum to Proof of Stake (PoS) could make it more vulnerable to government interference and censorship, according to a Merkle Science principal investigator.

Speaking to Cointelegraph after the Ethereum merger, Coby Morgan, a former FBI analyst and principal investigator in crypto compliance and forensics at Merkle Science, expressed his thoughts on some of the risks posed by the transition of Ethereum to PoS.

While Central issues were Widely discussed prior to the merger, Moran suggested that the high cost of becoming an auditor could lead to the standardization of nodes of authentication for larger crypto firms such as Binance, Coinbase and Kraken.

To become a full Ethereum network auditor, one must share 32 Ether (ETH), which is worth about $47,000 at the time of writing.

A pre-merger report from Nansen’s blockchain analytics platform earlier this month revealed that 64% of tethered ETH is It is controlled by only five entities.

Source: Nansen

Morgan went on to say that these larger organizations would be “subject to the whims of the governments of the world,” and when authentication nodes specify sanctioned addresses, the rewards could be “reduced and eventually the system launched,” while preventing companies from interacting with them.

Either you comply and you get rid of that kind of interaction […] Or you run the risk of being fined, scrutinized, or potentially penalized yourself.

Vitalik Buterin spoke about this risk in the August 18 developer a callsuggesting that one form that oversight can take is for auditors to choose to exclude or filter sanctioned transactions.

Vitalik went on to say that as long as some validators do not comply with the penalties, these transactions will eventually be captured in subsequent batches and the oversight will only be temporary.

On August 8, Tornado Cash Crypto Mixer became The first approved smart contract by a US government agency.

Related: Representative Emer demands an explanation of the “Tornado Cash” penalty issued by OFAC from Sec. softens

as a reaction, Various entities complied with sanctions and prevent sanctioned addresses from accessing their products and services.

The development has had a huge impact on the Ethereum community, with EthHub co-founder Anthony Sasano tweeting on August 16 that he would consider Ethereum a failure and move forward in the event of permanent censorship.