Sunday, August 21, 2022

Coinbase CEO To Shutdown Ether Staking If Government Interferes

Coinbase CEO To Shutdown Ether Staking If Government Interferes

Coinbase CEO Brian Armstrong said the exchange would end with ether in the event of government censorship. Armstrong said that this will not be part of the censorship of the Ethereum blockchain through the Coinbase Ethereum staking protocol.

Coinbase will end ETH strike to avoid censorship

Armstrong answered questions from an Ethereum developer who was interested in the centralization of Ether tokens. Data from Dune Analytics shows that 66% of Ether tokens placed on the Beacon Chain were owned by entities regulated by the Office of Foreign Assets Control (OFAC).

Concerned about the centralization of Ether tokens, the developer asked the executives of some major betting platforms, such as Coinbase, whether they would cooperate in censoring transactions if OFAC ordered such a measure.

When asked, Armstrong replied that in such a situation the exchange would rather suspend its strike than meet such requests. He said that the main focus will be on the big picture.

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Coinbase's CEO also said there could be a third option involving a lawsuit that could improve the exchange's performance. However, he said he was talking about a hypothetical situation and hoped it wouldn't happen.

OFAC's Role in Cryptocurrency Regulation

OFAC recently sanctioned the Tornado Cash cryptomixer. The sanctions have drawn mixed reactions from the crypto community, with some saying the move shows the regulator could also take similar action against a network like Ethereum if it sees fit.

Ethereum is transitioning to a Proof-of-Stake (PoS) network with a merger expected to take place in mid-September. In a PoS system, those who own the largest share of the network have the largest voting rights. When organizations with a large number of tokens partner with a token, they can voluntarily censor certain transactions.

The Ethereum PoS network has already met with a lot of resistance. An Ethereum miner has said it is forking the Ethereum blockchain to preserve the proof-of-work algorithm. Ethereum co-founder Vitalik Buterin also said he would support a hard fork of the network if the striking ISPs launch a censorship attack with veto power.

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