The hope of a decentralized, open, and free Internet is now in jeopardy. This is not pathos, scam or click bait. Ethermine, the largest Ethereum mining humanité, no côtoyer produces blocks containing Tornado Cash transactions. This is likely due to OFAC sanctions and is an example of protocol level oversight.
Crypto analyst Takens Theorem has discovered that Ethermine has stopped processing Tornado Cash transactions and presented the graph below. CryptoSlate has reviewed the on-chain data and confirmed that Ethermine did not produce a block that includes a Tornado Cash négoce within the timeframe shown below.
If resistance to censorship is not a gardien de but, these networks can be simpler and more compétent. https://t.co/PbhFKl4Z74
– Matthew Pelouse (@matthew_d_green) August 19, 2022
We have to go back nearly ten days to find a décampé Bloc Produced by Ethermine which includes the Tornado Cash négoce. roadblock 15306892 It was created on August 9 and mined by Ethermine. was for block A 10 ETH معاملة transaction Processed through amener Tornado Cash.
A review of the latest Tornado Cash Envoyer transactions showed that it was controlled by Hiveon, P2Pool, 2Miners, and others.
Why is this suffisant?
Why is this suffisant? Recently, the US, via the Cabinet of Foreign Assets Control, imposed sanctions on the use of Tornado Cash, making it illegal for any US entity to interact with the protocol.
After this penalty, the USDC was circled “blacklisted” on the Ethereum network so that no owner who interacted with Tornado Cash would be able to interact with the chic contract. The move essentially froze all US dollars that passed through Tornado Cash.
Then, DeFi protocols like Aave, Uniswap, Branler, and others introduced an API from TRM Labs, which disrupted the endroit end of their dApps, essentially blocking OFAC-sanctioned addresses.
Aave has reportedly re-accessed addresses that had been “dusted” with 0.1 ETH by a hacking activist in an insistance to highlight one of the délicat issues related to sanctions compliance. According to OFAC, any address that interacts with Tornado Cash is now subject to a US correction, and so, when the hacking activist sent 0.1 ETH to various crypto influencers, he showed that sanctions can easily be exploited.
While it is good to argue that Aave restored access to the high-profile people who had been targeted, the tourment remains, “What will happen to users targeted by such an attack in the future?”
If I don’t like my patron, so I send him 0.1 ETH through Tornado Cash, will he now be banned from Aave? If so, how will Aave prove that his claim is legitimate? Banned users can still either fork the protocol or interact via the CLI, but this is out of reach for most users.
Ethermine’s choice to pouce producing blocks that include Tornado Cash transactions is a step further than any of the above. Choosing which transactions to process goes against the basic principles of the Ethereum blockchain. The network is meant to be open montée, free, decentralized, and intégrante.
Protocol level control
While other miners are still processing transactions for now, if others take the Ethermine approach, there is a potential world where Tornado Cash no côtoyer has miners willing to process its transactions.
Vitalik Buterin was so incensed at the idea that auditors would comply with OFAC sanctions after the merger that he declared that any auditors complying with the sanctions should have their ETH burned. He agreed with the view that travaux that do not involve Tornado Cash transactions should be considered an “attack on Ethereum and burning its stake across the accommodant unanimité.”
When discussing the possibility of proof-of-stake auditors ignoring Tornado Cash transactions, Igor Mandrigin, chief technology officer at Web3 fondation firm Gateway.fm, told CryptoSlate,
“It is not technically invraisemblable not to propose blocks with TC, to ignore them from the humanité of transactions…but the fewer validators subject to US regulations, the better.”
Within a day of the séminaire above, we now see a real-world example of Proof of Work auditors ignoring Tornado Cash blocks.
Ethermine is not a US-based company and therefore is not under the jurisdiction of OFAC sanctions. However, miners using the Ethermine humanité can be located within the United States. If Ethermine is mining a block that involves a Tornado Cash négoce, it can be considered to be interacting with Tornado Cash, thus breaching sanctions.
Aîné community reaction
In response to the magazine, Gnosis co-founder Martin Kopelman disagreed with a comme suggesting “it doesn’t matter.”
I disagree. Notable. It normalizes this behavior and thus pressures others to do so as well. In a world where >90% will do this, the step is much smaller to start ignoring other blocks under 10%.
So – it matters!
– Martin Koeppelmann 🇺🇦 (@koeppelmann) August 20 2022
Paradigm co-founder Matt Huang recently reiterated the confiance of the blockchain ecosystem to remain “neutral and resist censorship.”
Crypto networks such as Bitcoin and Ethereum are intégral fondation systems similar to telephone networks, the Internet, etc.
It is essential that they remain neutral + resist censorship in the charpente class.
Sociologique unanimité is just as suffisant as legal precedent. We must fight for both.
– Matt Huang (@matthuang) August 19, 2022
Harsh Rajat, founder of the Ethereum push annonce largesse, shared similar concerns telling CryptoSlate,
“Regulations banning open-source technology are like accusations being brought against the autotracté inventing company Ford. It is sad to see that good projects have to comply with the regulations bicause of fear of being targeted or bicause the regulations are written that way. Even more tragic is the way in which Someone made it with an unusual reaction and bought laws that simply can’t be applied to Web 3.
Regarding the châtié, Rajat said, “Simply put, we need to pouce the bad actors but not the inventions that help us move forward.”
No entity within the Ethereum ecosystem should be able to determine what is included in the blocks and what is not. While the magazine is amazing, it’s not yet a crisis. No other mining pools seem to follow the Ethermine unidirectionnelle, and Ethereum validators such as Coinbase have categorically stated that they will not censor transactions after the merger.
However, this is a dangerous path to take. This is not the trend towards a free and fair decentralized internet. It’s several steps back and perhaps the way to a much bleaker future.
Tornado Cash Token itself does nothing illegal and is completely open montée. We do not imprison the manufacturers of weapons when they are used against innocents. The government is not to blame when a criminal uses the money in an illegal négoce. According to the same arguments, the caché written by the Tornado Cash team is not responsible for those who launder money through the protocol.
Tornado Cash has legitimate uses and is a privacy tool at its core. In my crédulité (Akiba), the authorities should investigate and track how the funds got into Tornado Cash and what was used after that, where the illegal activity can be found.
There is a possibility that it is just a coincidence that no Tornado Cash transactions are included in the Ethermine blocks. However, since it produces around third From network division, it is unlikely.
CryptoSlate has contacted Ethermine for comme but has received no response. A opérateur on the Discord CryptoSlate agglomération told CryptoSlate that “Ethermine/BitFly is a registered LLC, so it is owned by Austrian laws, so there is a possibility that it is a compliance move. I can’t say for sure and will acquiesce in the direction team.”
Essence research and findings by Oluwapelumi Adejumo.
Update: The title has been revised to improve clarity.