Censorship

Ocean mining pool refutes claims of censoring certain Bitcoin transactions

Dashjr rejected blame for accusations aimed against Ocean and asked Samourai Wallet to fix the bug “on your end.”

Bitcoin (BTC) wallet provider Samourai Wallet has accused BTC mining pool Ocean of censoring Whirlpool CoinJoin transactions and BIP47 notification transactions from Dec. 6. However, Ocean’s top executive has denied the claims while asking the Bitcoin wallet provider to fix a bug in their software.

On Dec. 7, Samourai Wallet claimed that a new policy enacted by Ocean mining pool censors certain Bitcoin transactions. In addition, the wallet provider accused X (formerly Twitter) and Block co-founder Jack Dorsey, who is an investor at Ocean, of a “hostile action.”

Samourai Wallet continues to accuse Dashjr of lying and deceiving community members by shifting the blame away from itself as it asks the community, “Don’t let them get away with this.”

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Midjourney AI users find workaround amid ban on Chinese President’s images

Midjourney AI bans the creation of Chinese President Xi Jinping’s images, but users find ways to create deepfakes.

Midjourney, an artificial intelligence (AI) service that generates images from natural language descriptions, recently banned the making of pictures of Chinese President Xi Jinping, much to the dismay of its users. However, the ban has not deterred its users from finding a workaround by creating deepfakes of Xi, which are manipulated digital representations produced by sophisticated machine-learning techniques.

Last week, Midjourney took action to prevent the proliferation of deepfakes on its platform by disabling access to its free trial version. Although the platform still allows the creation of images featuring world leaders, the Chinese President is notably excluded. Any attempt to generate an image with his likeness or even mention his name in a prompt is strictly prohibited by Midjourney.

According to a tweet by a user of the text-to-image AI generator, “It is still possible with /imagine, if you provide the full URL of an existing photo of Xi in the prompt. Or you can use /blend with two existing photos.” Another user said there was the alternative of using MidJourney v5’s blend function between two images but expressed fear of it being policed eventually.

An AI-generated image of Pope Francis wearing a puffer coat caused controversy over the advancement of fake imagery. Source: Twitter

Critics, like Sarah McLaughlin, senior scholar at the Foundation for Individual Rights and Expression (FIRE), have argued that the ban constitutes a form of censorship, undermining the fundamental principles of free speech and expression.

Related: Italian regulator draws criticism for blocking AI chatbot ChatGPT

In messages exchanged on the chat service Discord last autumn, Midjourney’s founder and CEO, David Holz, revealed that the firm had received complaints from local users about “various topics in different countries,“ prompting them to block numerous related words. However, according to chat logs examined by The Washington Post, Holz refrained from listing the prohibited terms to prevent unnecessary controversy.

In his Discord comments, Holz mentioned that the prohibited words were not solely connected to China. Nonetheless, he recognized that China was a particularly sensitive matter, as political humor might put Chinese users at risk. Holz attempted to explain the reasoning behind his actions by stating, “Our decision was not motivated by financial gain, and in this scenario, it is evident that ensuring access to this technology for Chinese individuals is for the greater good.“

Magazine: All rise for the robot judge: AI and blockchain could transform the courtroom

Joe Biden unhappy with Elon Musk for buying a platform that “spews lies”

Biden attended a fundraising event in Chicago for upcoming elections, wherein he called out Elon Musk for purchasing Twitter.

The relevance of social media platforms in swaying global politics was first highlighted with the rise of Facebook (rebranded later to Meta), which was accused of manipulating information based on user demographics. Twitter, which was recently acquired by Elon Musk, got the short end of the stick as US President Joe Biden accused the website of spewing lies.

Biden attended a fundraising event in Chicago for upcoming elections, wherein he called out Elon Musk for purchasing Twitter. He stated:

“Now what are we all worried about? Elon Musk goes out and buys an outfit that sends and spews lies all across the world.”

While the Biden administration has previously clarified its stance to promote the suppression of hate speech and misinformation on social media platforms, the president highlighted the lack of supervision on Twitter, adding:

“There’s no editors anymore. There’s no editors. How do we expect kids to be able to understand what is at stake.”

Ever since Bitcoin (BTC) launched in 2010, the crypto community chose Twitter as its home for discussing various nuances and attaining consensus on the decisions made. Musk’s $44 billion Twitter acquisition came with a promise of free speech. However, with the increase in hate speech, numerous advertisers have backed out from doing business with Twitter over content moderation concerns.

Musk’s immediate course of action for Twitter includes imposing an $8/month fee for users that wish to retain their account verification.

Related: Elon Musk faces class-action suit over mass Twitter layoffs

Supporting Musk’s Twitter acquisition drive, Changpeng “CZ” Zhao, the CEO of crypto exchange Binance, chipped in $500 million using fiat currency.

Binance has laid out plans to form a team to support Twitter’s blockchain efforts, however, an official statement is currently being awaited.

Joe Biden unhappy with Elon Musk for buying a platform that “spews lies”

Biden attended a fundraising event in Chicago for upcoming elections, wherein he called out Elon Musk for purchasing Twitter.

The relevance of social media platforms in swaying global politics was first highlighted with the rise of Facebook (rebranded later to Meta), which was accused of manipulating information based on user demographics. Twitter, which was recently acquired by Elon Musk, got the short end of the stick as United States President Joe Biden accused the website of spewing lies.

Biden attended a fundraising event in Chicago for upcoming elections, wherein he called out Elon Musk for purchasing Twitter. He stated:

“Now what are we all worried about? Elon Musk goes out and buys an outfit that sends and spews lies all across the world.”

While the Biden administration has previously clarified its stance to promote the suppression of hate speech and misinformation on social media platforms, the president highlighted the lack of supervision on Twitter, adding:

“There’s no editors anymore. There’s no editors. How do we expect kids to be able to understand what is at stake.”

Ever since Bitcoin (BTC) launched in 2009, the crypto community chose Twitter as its home for discussing various nuances and attaining consensus on the decisions made. Musk’s $44 billion Twitter acquisition came with a promise of free speech. However, with the increase in hate speech, numerous advertisers have backed out from doing business with Twitter over content moderation concerns.

Musk’s immediate course of action for Twitter includes imposing an $8/month fee for users that wish to retain their account verification.

Related: Elon Musk faces class-action suit over mass Twitter layoffs

Supporting Musk’s Twitter acquisition drive, Changpeng “CZ” Zhao, the CEO of crypto exchange Binance, chipped in $500 million using fiat currency.

Binance has laid out plans to form a team to support Twitter’s blockchain efforts, however, an official statement is currently being awaited.

Ethereum inches even closer to total censorship due to OFAC compliance

The minting of OFAC-compliant Ethereum blocks on a daily basis has grown to 73%, adding to the community’s growing censorship concerns.

Considering that protocol-level censorship is deterrent to the crypto ecosystem’s goal of highly open and accessible finance, the community has been keeping track of Ethereum’s growing compliance with standards laid down by the Office of Foreign Assets Control (OFAC). Over the last 24 hours, the Ethereum network was found to enforce OFAC compliance on over 73% of its blocks.

Ethereum sporting 73% OFAC-compliant blocks. Source: mevwatch.info 

In Oct. 2022, Cointelegraph reported on the rising censorship concerns after 51% of Ethereum blocks were found compliant with OFAC standards. However, data from mevWatch confirmed that the minting of OFAC-compliant blocks on a daily basis has grown to 73% as of Nov. 3.

Ethereum’s PFAC compliance trend. Source: mevwatch.info

Some MEV-Boost relays — that are regulated under OFAC — will censor certain transactions. As a result, to ensure the neutrality of Ethereum, the network needs to adopt a non-censoring MEV-Boost relay.

Ethereum validators can reduce OFAC compliance by discarding relays in their MEV-Boost configuration that censor transactions, such as BloXroute Max Profit, BloxRoute Ethical, Manifold and Relayooor.

Compliance with OFAC allows the United States government agency to enforce economic and trade sanctions. Previously, the agency sanctioned Tornado Cash and several Ethereum addresses.

As of today, 45% of all Ethereum blocks are considered compliant with OFAC.

Related: Ethereum sets record ETH short liquidations, wiping out $500 million in 2 days

The mainstream adoption of Bitcoin (BTC) and Ether (ETH) sped up after UnionBank, one of the largest universal banks in the Philippines, debuted cryptocurrency trading in partnership with the Swiss crypto firm Metaco.

“We are proud to continue UnionBank’s series of industry firsts, this time being the first regulated bank in the country allowing digital currency exchange features for clients,” said Henry Aguda, chief technology officer and chief transformation officer at UnionBank.

Twitter monetization and free speech drove Binance’s $500M injection: CZ

Binance will also assist Twitter’s integration into Web3 by implementing crypto payments and deploying a dedicated team of on-chain specialists to stop spam bot accounts.

Binance CEO Changpeng “CZ” Zhao has explained the reasoning behind its $500 million co-investment into Elon Musk’s Twitter, citing monetization potential, crypto community free speech and the opportunity to eventually “help bring Twitter into Web3.” 

CZ’s comments came from an Oct. 31 CNBC Squawk Box segment, where he explained what drove his co-investment with Elon Musk to acquire the social media platform noting:

“I believe Twitter has not been monetized well, it has not grown well, there’s many tactical problems like bots that spam my comments, there’s scammer accounts on there, it’s not been run well.”

“But I think the platform has huge value in itself, and especially now with Elon at the helm, we’re very confident,” he added.

Binance has not wavered in its support for Musk’s acquisition of Twitter since it first announced its support in May 2022. Other co-investors include Sequoia Capital Fund, Fidelity Management and Research Company.

The Binance CEO said Twitter’s difficult price valuation didn’t impact its investment decision as they considered the long-term prospects to be strong while giving crypto a “seat at the table” when it comes to free speech:

“We’re long-term investors, we believe in strong entrepreneurs, we believe in strong platforms, we believe in free speech […] we look at this from a 10, 20, 50, 100-year basis, so a little price fluctuation on a monthly basis doesn’t bother us.”

However, decisions as to what Twitter accounts are re-activated won’t lie in the hands of Musk, who said that a new “content moderation council” will bear the duty to determine what banned user accounts are restored.

However, the billionaire entrepreneur confirmed in a tweet that the council will exercise its discretion with “widely diverse viewpoints.”

CZ says it invested as it also hopes to play a part in Twitter’s eventual transition to Web3, such as adding cryptocurrency-based payments onto the social media platform:

“We want to help solve those immediate problems like charging for memberships [….] that can be done very easily by using cryptocurrencies as a means of payment.”

According to a Reuters report on Oct. 28, the crypto exchange plans to create a dedicated team to work on potential crypto and blockchain-based solutions for Twitter.

The new team will explore how to build on-chain solutions to address issues such as spam bot accounts.

Related: Twitter’s top brass gutted as Elon Musk’s takeover begins

Binance’s $500 million investment into Twitter makes them the fourth-largest shareholder in the social media platform among 19 investors.

Twitter is also no longer a publicly-traded company, having been delisted from the New York Stock Exchange on Oct. 28, following Musk’s decision to take the company private.

Ethereum solo validators that censor blocks should ‘be tolerated’ — Buterin

Speaking about a hypothetical scenario, the Ethereum co-founder said censorship should be tolerated depending on the case.

Ethereum co-founder Vitalik Buterin believes that solo validators that choose not to include certain transactions should “be tolerated” to stop the Ethereum community from becoming the “morality police.”

Vitalik Buterin made the comment in reply to a Twitter poll from latetot.eth, discussing a hypothetical scenario whereby a validator censors a transaction that doesn’t align with their beliefs.

The thread, published on Oct. 17, asked what should happen if a solo validator, in a country at war with another, decides not to process a block because it includes donations to the opposing military force. 

According to Ethereum’s co-founder, the answer for a censorship case should be aligned with the level of transgression.

The post attracted notable attention, as Vitalik explained in the thread that any other answer would potentially lead to turning the Ethereum community into morality police: 

In Ethereum proof-of-stake (PoS), validators decide what transactions to include in their blocks if any. PoS is a modern consensus method that powers decentralized finance (DeFi) projects and cryptocurrencies.

Also answering the thread, Martin Köppelmann, co-founder of Gnosis and a long-time Ethereum decentralized application developer, said he agreed with tolerating the validator in that situation while warning about how MEV-boost censorship rising in Ethereum following the Merge. 

Although the thread discusses a hypothetical scenario, concerns about censorship in the Ethereum network surged last week, with 51% of Ethereum blocks being compliant with the United States Office of Foreign Assets Control (OFAC) standards as of Oct. 14, as MEV-Boost relays take over market share one month after the Merge. 

Related: Ripple wants to bring Ethereum smart contracts to the XRP Ledger

MEV-Boost relays are centralized entities acting as trusted mediators between block producers and builders. All Ethereum PoS validators can outsource their block production to other builders. Due to Ethereum’s upgrade to a PoS consensus, MEV-Boost has been enabled to a more representative distribution of block proposers, rather than a small group of miners under proof-of-work (PoW).

As noted in a recent opinion piece, Slava Demchuk, CEO and co-founder of AMLBot, the Ethereum upgrade could bring modifications in Anti-Money Laundering (AML) and Know Your Customer (KYC) practices in the crypto industry. He stated:

“U.S. regulators are increasingly expressing concerns about the huge sums circulating in DeFi without any control. As the Ethereum blockchain serves as the primary chain for most tokens, its recent shift from PoW to PoS may be used as an argument for their attempts to influence (at least a part of) the decentralized market.”

51% of Ethereum blocks are now compliant with OFAC standards, raising censorship concerns

One month after the Merge, MEV-boost relays expanded its market share as block builders, data shows.

One month after the Merge, 51% of Ethereum blocks were compliant with OFAC standards, according to blockchain development Labrys’ data, as MEV-Boost relays take over market share. 

On Twitter, users highlighted how the figures represent a milestone towards censorship, as more blocks are under surveillance:

OFAC stands for the Office of Foreign Assets Control, the entity in charge of enforcing United States economic sanctions, while MEV-Boost relays are centralized entities that act as trusted mediators between block producers and block builders. In this way, all Ethereum proof-of-stake (PoS) validators can outsource their block production to other builders. 

This metric tracks how many blocks were built by OFAC-compliant MEV-Boost relays since the Merge. Due to Ethereum’s upgrade to a PoS consensus, MEV-Boost has been enabled to a more representative distribution of block proposers, rather than a small group of miners under proof-of-work (PoW).

Speaking to Cointelegraph in September, Lachan Feeney, Labrys’ CEO, noted that in the case of hard censorship, that would mean that “no matter how long you waited, no matter how much you paid, you would never get to a point where those sanctioned transactions would get included in the blockchain.”

Under a hard censorship scenario, “nodes would be forced by regulation to basically discard any blocks with any of these transactions in them.”

He also noted that even with soft censorship, when sanctioned transactions would eventually be validated, it would likely result in long waits and high-priority fees, making the user experience substandard.

According to Labrys’ page, there are currently seven major MEV-oost relays including Flashbots, BloXroute Max Profit, BloXroute Ethical, BloXroute Regulated, BlockNative, Manifold and Eden. “Of the 7 available major relays, only 3 do not censor according to OFAC compliance requirements. OFAC compliant relays will not include any transactions that interact with the Tornado Cash smart contract or other sanctioned wallet addresses as designated by OFAC,” stated the company.

45% of ETH validators now complying with US sanctions — Labrys CEO

Labrys CEO Lachlan Feeney is trying to raise awareness among validators running Flashbots’ software that they may potentially be contributing to censorship within the Ethereum network.

According to the CEO of blockchain development agency Labrys, Lachan Feeney, approximately 45% of all Ethereum blocks currently being validated run MEV-boost relay flashbots and comply with United States sanctions.

Speaking to Cointelegraph in an interview on Sept. 30, Feeney noted that while reports have stated that 25% of all blocks validated since the Merge complies with United States sanctions, this is a lagging indicator and the current number is likely to be closer to one out of every two blocks.

Feeney pointed out that MEV-Boost relays are regulated businesses, often U.S.-based, and are “censoring certain transactions in the blocks that they build, particularly transactions from Tornado Cash.”

The CEO also pointed out validators have a financial incentive to use MEV-Boost relays, which would drive an uptick in their usage, noting:

“The issue, is that from the validators perspective, these guys are paying them to sort of do this. So if you want to make more money, you just turn this feature on and as a validator, you sort of boost your yield.”

MEV-Boost relays are centralized entities dedicated to efficient Maximal Extractable Value (MEV) extraction. With Flashbots being the most popular, MEV-Boost relays effectively allow validators to outsource block production and sell the right to build a block to the highest bidder.

Labrys released an MEV Watch tool on Sept. 28, which can inform validators about which MEV-Boost relays comply with Office of Foreign Assets Control (OFAC) sanctions. Referring to the motivation behind the tool, Feeney said:

“We’re just trying to raise some awareness for those who are unaware that by running this software, they are potentially contributing to censorship of the network.”

Feeney noted a worst-case situation often referred to as hard censorship, where “nodes would be forced by regulation to basically discard any blocks with any of these transactions in them.”

“That would mean no matter how long you waited, no matter how much you paid, you would never get to a point where those sanctioned transactions would get included in the blockchain,” he explained.

He also pointed out that even in the event of soft censorship, where sanctioned transactions would eventually be validated, it could take hours and require a high priority fee, resulting in a sub-par user experience.

Related: MEV bot earns $1M but loses everything to a hacker an hour later

These findings are reinforced by Ethereum researcher Toni Wahrstätter, who published research on Sept. 28 suggesting that of the 19,436 blocks verified by the Flashbots Mev-Boost Relay, none included a Tornado cash transaction.

How many blocks from different MEV Boost Relays contain Tornado Cash transactions. Source: Toni Wahrstätter.

Censorship fears were prevalent before The Merge. Speaking to Cointelegraph, the lead investigator for crypto compliance and forensic firm Merkle Science, Coby Moran, suggested the prohibitive cost of becoming a validator could result in the consolidation of validator nodes to the bigger crypto firms — who are much more susceptible to being influenced by government sanctions.

Will Ethereum 2.0 be vulnerable to censorship? Industry professional explains

Ryan Berckmans, an Ethereum community member and investor, discussed the potential consequences that the Tornado Cash ban could have on the future of the network.

The Ethereum network will be able to withstand censorship risks both in the short and long term, according to Ethereum community member and investor Ryan Berckmans.

The ban of Ethereum-based privacy tool Tornado Cash by U.S. authorities earlier this month left many wondering whether Ethereum transactions could be also at risk of censorship, especially after Ethereum’s imminent transition to a proof-of-stake system.

A widespread concern is that entities controlling a large chunk of staked Ether (ETH), such as Coinbase or Kraken, would start censoring transactions to comply with U.S. sanctions. That is an unlikely scenario, according to Berckmans, who sees the high centralization of staked ETH as a temporary issue.

With time, the costs of entry to the staking business will drop due to the “maturity of open-source tools and industry expertise as well as the generally reduced risk profile,” said Berckmans. That will allow more and more players to enter the staking business, thus reducing the dominance of large staking pools.

“The idea that these will be able to somehow sustainably censor user transactions or affect the fork choice in Ethereum, it’s just not a credible idea,” Berckmans pointed out. 

Moreover, according to Berckmans, the Tornado Cash ban in the United States was a policy mistake that is unlikely to result in more government sanctions. He said that U.S. policymakers are likely to acknowledge the mistake and take a more favorable approach to Ethereum, which is “inherently aligned with America’s interests.” 

“Ethereum is about permissionless innovation, free enterprise, property rights, globalization,” Berckmans explained.

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