- Coinbase Wrapped Staked ETH (cbETH) has a blacklist function in the smart contract.
- Meanwhile, it is getting criticized by some in the crypto community.
- Many other liquid staking offerings do not have this blacklist feature.
In the smart contract feature of Coinbase, cbETH now came along with a blacklist function. It will permit Coinbase to blacklist those addresses which need to do so. Coinbase will proceed with the blacklist addresses if it finds that the wallet does not obey its user agreement. The exchange can further block the fund of the customer.
Well, there are also some other firms that have already introduced the blacklist function. The U.S. based global financial firm, Circle has also blocked the funds which were used for mixing service Tornado Cash. It blocked 75,000 USDC of the users that linked with the ethereum mixing platform.
However, this blacklist function is getting mixed reactions. Some of the crypto holders look quite disappointed, as they think censorship is not a good example.
Coinbase CEO’s Previous Belief
Over the censorship, many of the crypto holders recall the criticism that was shared by the CEO of Coinbase earlier. Brian Armstrong, who is the CEO of Coinbase, said in August 2022 that their firm may close the staking service in place of censorship, if the regulators called for it.
Armstrong said that, “It’s a hypothetical we hopefully won’t actually face. But if we did we’d go with B i think. Got to focus on the bigger picture. There may be some better option (C) or a legal challenge as well that could help reach a better outcome.”
It must be noted that Coinbase is proceeding toward becoming the largest ethereum stakers on the Ethereum network. As per the analysis, Coinbase, Kraken, and Binance combinedly have almost 30% of all staked ETH, with 15%, 8.5%, and 6.75% respectively in its account.
Source: https://www.thecoinrepublic.com/2022/09/14/smart-contract-shows-coinbase-may-blacklist-staked-ethereum/