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BloXroute to Reject Transactions with Sanctioned Addresses

New Anti Money Laundering Measure to be Enforced Immediately

BloXroute, a blockchain infrastructure company, has announced that its relay nodes will now reject any transactions with addresses on the U.S. Office of Foreign Assets Control (OFAC) sanctions list (Source: Pixabay). This move aims to crack down on potential money laundering through the Ethereum network.

According to a tweet from bloXroute, this new policy will be effective immediately. The company’s relay nodes will decline any block bids that contain transactions interacting with sanctioned addresses.

BloXroute claims that this measure will not compromise Ethereum’s open and permissionless nature. However, some in the crypto community have criticized the move. Nikita Zhavoronkov, lead developer of Blockchair, suggests it represents a shift towards more regulatory compliance that could set a “quasi 51% attack” precedence if widely adopted.

Concerns about Censorship and Complicated Global Compliance

Lachlan Feeney, CEO of Labrys, expressed concerns about the “concerning precedent” this sets for censorship at the protocol level. He advocates for compliance at the application layer instead. Feeney also pointed out the difficulties of complying with different countries’ sanctions lists to construct blocks that satisfy a global set of regulations.

The debate has highlighted potential issues if other countries like China or Russia impose sanctions that affect legitimate U.S. businesses. There are underlying fears about how such measures could disrupt the seamless operation of Ethereum’s global infrastructure. Though aimed at curbing illicit activities, BloXroute’s new policy has opened up questions about censorship resistance, regulatory compliance, and coordinated global governance in crypto.

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