Coinbase ($COIN)
Coinbase CEO Would Rather End ETH Staking Service Than Bow to Government
Brian Armstrong, CEO of Coinbase, stated on Thursday that he would refuse to censor the Ethereum blockchain using his platform’s concentrated participation in the protocol.
If forced by the government to do so, Armstrong would opt to terminate the service.
Armstrong made his intentions about centralizing ETH staking clear. According to Dune Analytics, 66% of the ETH staking in the beacon chain is held by entities that are regulated by the US Agency for Foreign Assets Control (OFAC).
Armstrong stated that if Coinbase were to be placed in the position of being forced to transact by OFAC, it is likely that the exchange would choose to terminate its staking service rather than comply with the law.
“It is a hypothesis that we hope not to face in fact. There may be a better option, or also a legal challenge that could help achieve a better outcome.”
he added.
Last week, OFAC sanctioned Tornado Cash, an Ethereum-based privacy protocol. This has raised concerns that they may be willing to censor Ethereum at the protocol level if it is in their power.
Under the proof-of-stake or PoS system, those who hold a large stake in the network have a higher voting share in determining the status of the ledger. If entities with a net interest beyond a certain threshold collude, they can censor transactions at will.
Ethereum currently uses proof-of-work or PoW, but plans to transition to proof-of-stake in mid-September.
Ethereum co-founder Vitalik Buterin confirmed who would see this censorship as an attack on Ethereum.
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