CEO of Coinbase – Brian Armstrong has reiterated that his company will not use staked ETH to censor the Ethereum protocol. He also said that if he is compelled to do so by government or regulatory authorities, he’d rather shut down the staking service.


Brian made his intentions clear in response to an Ethereum developers question regarding the centralization of staked ETH. 66% of ETH staked on the beacon chain is held by entities that are regulated by the Office of Foreign Assets Control (OFAC) according to Dune Analytics.


Because of this, the developer asked the leaders of some of the bigger staking entities if they would agree to censor transactions if asked to do so by the OFAC. Brian replied that if they were compelled to do so, Coinbase would rather shut down their staking service than comply outrightly.


He said that everybody has to focus on the bigger picture that there may be a better option or a legal challenge that can lead to a better outcome. He also added that it is a hypothetical situation that he hopes Coinbase does not have to face.


The OFAC sanctioned the cryptocurrency mixer – Tornado Cash – last week and this has raised concerns that they may also be willing to censor Ethereum at a blockchain level if it is within their power.


Under the proof of stake (PoS) system, users who hold a large stake in the network have a greater voting share in determining the state of the ledger. If entities with a net stake beyond a certain threshold collude, they can censor transactions at will.


Ethereum currently uses proof of work, but will transition to proof of stake in mid-September. Co-founder, Vitalik Buterin has confirmed that he would support the Ethereum blockchain hard-fork and slashing staking providers holdings if they enacted a censorship attack.


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