More and more Ethereum blockchain operators comply with sanctions, raising censorship concerns

More and more Ethereum blockchain operators have complied with sanctions imposed by the Office of Foreign Assets Control (OFAC), raising censorship concerns among decentralization supporters and network participants.

Ethereum blockchain operators monitoring transactions in compliance with OFAC guidance

Ethereum researcher Tony Wahrstatter noted that five of the six largest block creators on the Ethereum blockchain are actively monitoring some transactions in line with guidance from the Treasury Department’s Office of Foreign Assets Control (OFAC).

Tornado Cash decentralized mixer transactions being censored

Most of these censored transactions originate from the Tornado Cash decentralized mixer, according to Wahrstätter, a protocol that the Treasury Department has blacklisted due to its use by bad actors, including the North Korean hacking organization Lazarus.

Oversight across pivotal Ethereum network players

Wahrstätter’s research also pointed to oversight across three pivotal players that keep the Ethereum network running – validators, relays, and block creators.

Censorship concerns in decentralized networks

Censorship has been a major topic as blockchain technology advances and cryptocurrency adoption spreads around the world. Proponents of decentralized networks often express unease about centralized entities and the power they have over decentralized operations.

These concerns have been raised by Wahrstätter, who notes that obstacles rooted in the concentration of power by a few network participants pose a threat to blockchain ecosystems.

“Resistance to censorship is the key to political neutrality in blockchain. No single entity should control two-thirds of blockchain content. Decentralization is essential; centralization at any layer of the stack could harm the entire ecosystem.”

Tony Wahrstatter stated.

Solutions proposed to combat censorship and centralization

In an effort to combat the increasing censorship and centralization of Ethereum (ETH), Wahrstatter proposed two solutions.

The first is a listing to assist oversight bodies in dealing with OFAC-sanctioned transactions. This solution also recommends booting incompatible drivers. Notably, this inclusion list was designed by Ethereum founder Vitalik Buterin and developer Mike Neuder in August 2023.

Second, the researcher proposed cryptographic memo sets that would make it impossible for entities to censor cross-chain transactions based on their origin or content.

Buterin, a long-time advocate of privacy and decentralization, has noted that censorship resistance is the cornerstone of any blockchain, News Agencies previously reported.

The Ethereum creator also criticized the United States for its approach to regulating cryptocurrencies and how it affects networks like Solana (SOL).