Media found out about Coinbase’s ability to block addresses with staked ETH

According to BeInCrypto, the smart contract allows users to be selectively blacklisted

14.09.2022 - 13:25

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1 min

What’s new? Cryptocurrency exchange Coinbase’s smart contract for Ethereum staking, Wrapped Staked ETH (cbETH), has a blacklist feature. This allows the platform’s representatives to selectively block addresses if they believe the wallet violates its user agreement, and freeze customer funds in the event of a breach or if required by law. BeInCrypto reports about this.

BeInCrypto’s material

What happened before? Some in the crypto community have criticized the possibility of censorship, citing past statements by Coinbase CEO Brian Armstrong. In August, he stated that the platform would stop participating in ETH staking if US regulators demanded censorship. Armstrong noted that this is only a hypothetical situation, for now, adding that he hopes not to see similar requests in real life.

According to a report by analytics firm Nansen, 64% of staked ETH is controlled by 5 entities: Lido Finance (31%), Coinbase (15%), Kraken (8,5%), Binance (6,75%), and Staked.us (3,92%). Staking accounts for just over 11% of the total number of circulating coins on the Ethereum network.

Coinbase is not the only cryptocurrency company to blacklist addresses. Circle froze 75 000 USDC stablecoins associated with the sanctioned addresses of the Tornado Cash crypto mixer.

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