BloXrout will reject transactions with OFAC-blacklisted addresses

BloXrout, a blockchain infrastructure company that provides DeFi tools, said its relays will start rejecting transactions that include addresses on a US sanctions list.

“Effective immediately, all bloXroute relays will reject block bids if they contain OFAC transactions (Tx that interact with addresses appearing on the OFAC SDN list)” bloXroute wrote Monday on X. The change is expected to have “no effect” on the network, “other than reducing our own win rate.”

Transaction censorship by bloXroute should have no impact Ethereum ETH

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The company’s “unstoppable, permissionless and anti-fragile” nature, the company said. “Because it is decentralized and globally distributed and cannot be easily influenced by a single entity even if it has the best network technology.”

The announcement received some criticism from commenters on answer. “Are you self-censoring, or did the state come knocking?” asked user Marius Kjærstad.

Sanctioned addresses

Other major crypto players have demonstrated that they comply with the requirements of the US Treasury Department’s Office of Foreign Control not to facilitate transactions for anyone on the sanctions list.

Tether, the centralized issuer of the largest stablecoin USDT, recently released the to freeze of all crypto addresses on the OFAC list. Weeks later, the company said it had “brought the U.S. Secret Service into our platform and is in the process of doing the same” for the FBI.

There have also been attempts at transaction censorship on decentralized Bitcoin. In 2021, US mining company Marathon said it would not include transactions with blacklisted OFAC addresses in blocks, but immediately withdrawn the movement. A researcher in November noticed that the mining pool F2Pool has rejected several such transactions.

Lead developer of blockchain explorer Blockchair Nikita Zhavoronkov wrote that he sees the announcement of bloXroute as another sign of a larger trend.

“While bloXroute is neither a miner nor a validator, this is the first case of someone rejecting entire blocks of sanctioned addresses. Previous cases were all about transactions not being included in block templates,” he says wrote on X, adding that if enough validators follow this trend, it could lead to a kind of “51% attack” on Bitcoin and Ethereum.

“With the advent of ETFs and BlackRock, Bitcoin and other major cryptos are increasingly committed to compliance and KYC, so we can expect to see more pools sticking to the ‘rules,’” Zhavoronkov said.