Key Takeaways
- According to crypto analyst Takens Theorem, Ethermine had stopped processing Tornado Cash transactions over a week ago.
- If others follow Ethermine’s lead, there is a possibility that Tornado Cash will no longer have miners willing to process its transactions.
Ethermine, the largest Ethereum Miner, had stopped processing Tornado cash transactions. This comes after the U.S. government sanctioned the crypto mixer last week. The Treasury Department’s Office of Foreign Assets Control (OFAC) added Ethereum addresses associated with the tool to its specially designated nationals and blocked person list.
Crypto analyst, Takens Theorem, took to Twitter to reveal that Ethermine had stopped processing Tornado Cash transactions over a week ago. After a review of the chart presented by Takens, Ethermine had not produced a block that included a Tornado Cash transaction during the timeframe.
Many in the crypto community are outraged at this development as they argue that choosing which transactions to process goes against the core principles of the Ethereum blockchain. The network is supposed to be open-source, decentralized, and inclusive.
If others also follow Ethermine’s footsteps, there is an increasing possibility that Tornado Cash no longer has miners willing to process its transactions.
Upon news of the Tornado Cash sanctions, several companies, including Circle, software version management platform Github, and Ethereum infrastructure provider Infura, blacklisted Tornado Cash-affiliated Ethereum addresses listed in the OFAC statement.
Reportedly, leading decentralized protocols like Uniswap, Balancer, and dYdX, have also stopped users because of the OFAC sanction on Tornado Cash. Aave, Uniswap, Balancer, and others introduced an API from TRM Labs, which disabled the front end of their dApps, essentially banning addresses sanctioned by OFAC.
Aave clarified that the TRM API on its app was responsible for blocking addresses that received ETH from unknown sources through Tornado Cash.
The Tornado Cash sanction has triggered concerns that centralized entities running Ethereum Proof-of-Stake validators may be forced, in the future, to censor transactions on the Ethereum blockchain itself.
According to DXdao contributor Eylon Aviv, five of the six largest validating entities would most likely be forced to comply with OFAC regulations.
All this brings into question how the Government can sanction an open-source, decentralized protocol and why the move by OFAC is effectively criminalizing the act of seeking financial privacy.
Ethermine’s decision to comply with the sanctions only heightens the crypto community’s concerns about financial privacy and the decreasing prospect of DeFi thriving in an increasingly regulatory environment.
