For most cryptocurrencies, being compliant with federal sanctions is sought to have a negative influence on its global reach.
However, when it comes to the second-largest cryptocurrency by market capitalization, the case is up to investors. A significant share of power resides with the investors to decide the degree of compliance the ecosystem obeys.
Data suggest that almost 60% of all post-Merge Ethereum blocks comply with the United States sanctions placed on them by the Office of Foreign Assets Control (OFAC). The OFAC is a financial intelligence and enforcement agency of the U.S. Treasury Department. It administers and enforces economic and trade sanctions in support of U.S. national security and foreign policy objectives.
While the crypto industry seems dissatisfied with the transformation, many of them have failed to realize their own contribution to it. The community’s activities over the years have helped Ethereum achieve total OFAC compliance.
One of the biggest factors threatening the credible neutrality of Ethereum is the use of censoring miner extractable value (MEV) relays by crypto ecosystems and exchanges. The MEV relays work as a connector between block producers and block builders, which are being used by crypto firms in the sector. Several crypto firms have also been using these including Celsius Network, Coinbase, Kraken, Binance, and Cream Finance, to name a few.
As of writing, 67 of the last 100 Ethereum blocks were found enforcing OFAC compliance. As of November 3, over the past 24 hours, the Ethereum network was suspected of applying OFAC compliance on about 73% of its blocks as reported by Todayq News. The reports from October had suggested the compliance levels to be about 51% signifying the rising censorship concerns.
In the context of investors, it is essential to understand that protocol-level censorship is harmful to the ultimate goal of crypto which strives for accessibility and inclusivity in finance. Thus, it is essential for both investors as well as service providers to prefer non-censoring MEV-boost relays.
In recent times the Ethereum wallets have also witnessed inactive whales making a sudden movement.
On December 19, it was revealed that 22,982 Ethereum (ETH) were transferred to new addresses by two addresses that had been idle for more than four years. The ETH coins in question were discovered transferring 13,103.99 ETH and 9,878 ETH, respectively, from the trading platforms Genesis and Poloniex.