45% of all ETH blocks now comply with US sanctions

In August, the US government announced that crypto-mixer Tornado Cash had become illegal for Americans. Soon, wallet addresses using the blender were blacklisted, causing a lot of uproar. But Ethereum (ETH) did not become more decentralized after the merger upgrade. A major blockchain developer confirms this.

Ethereum meets the penalties

Lashan Finney, CEO of Labrys, told Cointelegraph that approximately 45% of all Ethereum blocks on the blockchain are now compliant with US sanctions. This means that transactions originating from criminals will not appear on the blockchain, and therefore people must comply with the law in order to use their tokens. This will not only apply to ETH tokens, but also to All Tokens on the Ethereum network.

According to him, about 45% of all auditors work MEV Enhanced Relay Servers from Flashbots Provider. This service has also been in the news previously as it will contribute significantly to the centralization of the network. So 45% of auditors will rely on the same provider.

He emphasized that most researchers measure that 25% of all auditors use these servers. But it’s actually, he says, a lot like 45%. These providers are companies that originate mostly from the United States. They pay validators extra to use software that extracts transactions like Tornado Cash from the blocks. It is therefore very attractive for attackers to take advantage of this, although it does not bode well for Ethereum’s decentralization.

Ethereum is increasingly centralized

Vinny says he wants to create awareness among developers. He fears that “strict censorship” will be used at worst. Users are forced to comply directly with some regulations, rather than, for example, through the courts. With “soft censorship” you will need high transaction hours and costs to add your transactions.

The fear of censorship has been around for a long time. Almost half of all blocks will be produced by only two staking providers: Lido and Coinbase. These are simply companies that the government can take advantage of directly. With Flashbots servers, this percentage will increase even more.