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ethereum MEV relay bloXroute Labs said they will reject blocks containing transactions from addresses listed on the Office of Foreign Assets Control's (OFAC) list of Specially Designated Nationals and Blocked Persons (SDN) starting December 18.
In a December 18 statement on X (formerly Twitter), the company saying:
“Effective immediately, all bloXroute repeaters will reject block offers if they contain OFAC transactions (transactions that interact with addresses that appear on the OFAC SDN list).”
Censorship-resistant concerns
Since ethereum moved to a proof-of-stake network, one of the important issues that community members have raised was OFAC-compliant blocks. Many in the community argue that these blocks would compromise ethereum's neutrality by excluding transactions from addresses on the SDN list.
Nikita Zhavoronkov, lead developer at Blockchair, explained how bloXroute's move could eventually result in a 51% attack against the blockchain network.
According to Zhavoronkov:
“With the advent of ETFs and Blackrock, bitcoin and other major cryptocurrencies are increasingly adhering to compliance and KYC, so we can expect more groups to follow the “rules.” Once more than 51% comply, there is a high probability that we are just a few months away from the majority of miners starting to drop orphaned blocks containing sanctioned transactions. A constant attack status of 51%. If you, as a miner, do not follow the OFAC list, your blocks will be rejected and you will be out of business.”
Data of Mevwatch showed that OFAC-compliant network blocks currently stand at 32%, a sharp drop from last year, when around 80% of blocks were in compliance with regulatory authorities.
bloXroute commits to ethereum decentralization
bloXroute Labs emphasized its commitment to upholding ethereum's decentralized and permissionless principles while ensuring compliance within the legal frameworks of its jurisdictions.
According to the company, the strength of the blockchain network lies in its decentralization and global distribution, making it resistant to singular influences, even those that leverage advanced network technologies.
Meanwhile, bloXroute Labs' policy change adds to the ongoing debate over censorship resistance within the broader crypto ecosystem. Numerous crypto companies, including stablecoin company Tether, have significantly improved their collaboration with authorities as part of their bid to comply with regulations.
