BloXroute Labs to Implement OFAC-Compliance, Sparking Crypto Censorship Debate

By: Eliza Bennet

BloXroute Labs, an Ethereum MEV-relay, recently announced that it will begin rejecting blocks containing transactions linked to the US Office of Foreign Assets Control's (OFAC) Sanctioned National and Blocked Persons List, igniting a spirited debate about censorship in the crypto ecosystem. This policy change comes amidst concerns over Ethereum's transition to a Proof of Stake network, where OFAC-compliant blocks could potentially jeopardize Ethereum's neutral stance by excluding specific transactions.

Noted developers and community members have raised concerns that this move could set the stage for a potential 51% attack on the blockchain network. Data from Mevwatch suggests that the current number of OFAC-compliant blocks is at 32%, a figure that has sharply fallen over the year from an earlier 80%.

BloXroute Labs, however, remains committed to maintaining Ethereum's principles of decentralization and permissionless operation while staying within the legal confines of its jurisdictions. The policy shift echoes larger discussions on crypto censorship resistance as several crypto companies like Tether have intensified their work with authorities to remain compliant with regulations.