US regulation is killing the spirit of encryption

Original author: Canglangzhishui

From third-party review to self-censorship, the so-called anti-censorship cryptographic spirit is long gone.

Last night, Bitcoin developer and observer @0xB10C published a report titled "Six OFAC-approved transactions missing - Asian mining pool is the first mining pool to comply with US sanctions?" on the social platform. The report pointed out that F2Pool filtered blocks 810727 and 813357, and the missing four OFAC-approved transactions may have been filtered.

OFAC imposes economic and trade sanctions on targeted foreign countries and regimes, terrorists, international drug traffickers, persons engaged in activities related to the proliferation of weapons of mass destruction, and other threats to national security, based on the foreign policy and national security objectives of the United States, the foreign policy or economy of the United States.

F2Pool is the third largest Bitcoin mining pool. When Wang Chun, the co-founder of F2Pool, responded with "Why are you surprised that I rejected the transactions of these criminals? CZ deserves what he gets.", he seemed to admit that F2Pool did not make the omission of transaction packaging unintentionally. The response has now been deleted. But obviously, he thinks he is right.

Optimistically speaking, filtering transactions by a single pool will not affect the censorship resistance of the entire Bitcoin network, and the Bitcoin network can continue to work normally.

But this sentence in the report: "But why is F2Pool, which originated in Asia, the first pool to filter transactions based on US OFAC sanctions?" makes people sigh.

Yesterday, November 22, 2023, was not only recorded in the history of Binance, but also in the history of cryptocurrencies. In order to reach a settlement with regulators, the largest cryptocurrency trading platform with the largest trading volume took out $4.3 billion.

CZ gave up the fruits of his six years of entrepreneurship and officially became a thing of the past. He admitted to anti-money laundering and violating US sanctions and stepped down as CEO, in exchange for a stable path for Binance's future.

CZ appeared in Seattle court, source: GeekWire

The US regulator used a move of "killing the chicken to scare the monkey", and all crypto practitioners are in danger.

Beginning in August 2022, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions on the crypto mixer Tornado Cash, claiming that the service had laundered more than $7 billion in the past three years and helped North Korea’s state-run hacker group Lazarus Group evade U.S. penalties.

This year, the SEC took enforcement action against an NFT project for the first time, charging Impact Theory, a Los Angeles-based media and entertainment company. Impact Theory agreed to stop the lawsuit and will pay approximately $6.1 million in "disgorgement, prejudgment interest, and civil penalties."

In addition, DeFi has also been included in the regulatory review list. The decentralized stablecoin protocol MakerDAO announced the launch of the DeFi lending protocol Spark Protocol centered on the stablecoin DAI, but it is not available in the United States or IP addresses. Its terms of service also prohibit U.S. users from using VPNs to hide their U.S. residence. Users in other non-U.S. regions are also prohibited from using VPNs.

Before the "execution", some people used fines in exchange for regulatory "leniency". Before the next wave of arrests, the regulatory shotgun had just been raised, and a group of people had already been scared away. They didn't want to be the next person to be put on the execution ground.

Coinbase's chief legal officer published an article on March 22 titled "We asked the SEC to provide Americans with reasonable encryption rules, but what we got was legal threats." The tone of the article is very sad, and it mainly talks about one thing, which is that the SEC has pushed for clear regulatory policies to no avail. However, according to the article, Coinbase actively requested compliance, held more than 30 meetings with the SEC, and spent millions of dollars researching registration methods, but did not receive a response for 9 months.

While young crypto people are still obsessed with the rebellious and pure crypto spirit, the old guns are forced to think about the way out of "KYC", "compliance" and "regulation" under US supervision.

This year marks the tenth anniversary of the Snowden incident. The so-called "privacy" and "anti-censorship" of the crypto spirit have been killed. It is the US politics and US supervision that have bent the backbone of the crypto spirit with one punch after another.

This is no longer the era of encryption, but the era of regulation. Snowden, who is far away, sighed helplessly for the crypto spirit.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia