10 ms·

SEC Claims All of Ethereum Falls Under US Jurisdiction

56 points by yasp 4y ago

metadat 4y ago
This battle was always hanging far off in the fog of the horizon, and now it's coming into the spotlight for primetime. Can technology defeat the bureaucrats of the United States Government? Time will reveal all.
- vivab0rg 4y ago
  Grabs popcorn
- boc 4y ago
  If the US government goes to war with crypto, it’s not going to be a long fight. The exodus of corporate capital from the ecosystem will be a fatal blow to crypto prices and projects. Rule number one is don’t fight the IRS.
  - aaaaaaaaata 4y ago
    > fatal blow to crypto prices wat? Worse than $900 ETH? Not too sure. > Rule number one is don’t fight the IRS. Google or Twitter search "boating accident"
- isitmadeofglass 4y ago
  It’s funny that the base assumption is always that all bureaucracy is bad and needs to be demolished. If the same mentality has reigned in the automotive industry proper as it does in the new tech-automotive industry, the concept of crash tests would never had been invented, we’d just put the car on the market and do statistics on how many of the customers died. The concept of phased studies to show efficacy and lack of toxicity in drugs wouldn’t exist. We’d just sell whatever and stop producing the drugs that killed people and focus on the ones that seemed to work in market. The idea that “the consumer chose the product so all responsibility is theirs” is extremely naive and not echoed anywhere else, so why is it that the crypto space seems to feel that they should be completely excerpt of all regulations even as we see constant scams, theft and real, life detailing financial damages pushed onto the consumers who enter into the space in good faith.
  - Ebree 4y ago
    I also think banning free choice in shop by regulation is proper saving lives by gradually limiting toxic to human body carbohydrates in food to safest & healthiest level of zero... just after banning me option to buy healthiest human food and my daily meal - meat replacing it with cancerous plant-oil replacement. The safest roads - these where all people drive glass cars or tanks. Regulations as everything should also be decentralised & deglobalised. You don't like law? Go to the region with a different laws restrictions or none. But nobody wants promoting invasion of one option on other making it an authoritarian default. Seatbelts in 99% cases helps in 1% damages you including burning up alive. With full freedom you learn responsibility & create organic institutions to educate others & learn choosing good over bad. When you limit freedom you push people into state of mental disability to evaluate reality on their own & dependency on centralised arbiter. Leaving slave mentality & jump starting own brain takes a while. Often requires generational replacement. I'm all in for full information and detailed labelling, state institutions with objective studies & product stamping. But never for any choice limitation. I want to choose the filters, with option of none, not being forced to use one. I also want democracy with personal voting on each regulation & not being forced to vote for this or that package of things coerced into blindly accepting bulk of things attached to one thing i actually care about to change. Internet supposed to add to our regularly limited choices. What's it's feature and it's curse.
WheelsAtLarge 4y ago
This sounds like bad news but I see it as good news. The only way the SEC can go after fraudsters is to have jurisdiction over what they have done. The SEC can now go after the frauds against Ethereum users no matter where the fraud was committed. Crypto will never be a legitimate investment class if people can't trust that they will get their investment back. It's also impossible for it grow to fill a need without trust. Crypto-Land should be jumping with joy at hearing this news.
- deleted 4y ago
  [deleted]
- customkitchen 4y ago
  If you take that angle then crypto will still never be a legitimate investment class either way, because all of it (including BTC and ETH and everything else) is a giant fraud predicated on the falsehood that it is "decentralized" and somehow that makes it unregulated. There is no other reason for it to exist. This is just another nail in the coffin, they can't lie about it anymore. If crypto-land really wants to follow through on their lawless anarchist fantasies, then they should be even happier if the SEC bans all of it outright. Then they can all go back to their roots when the only thing bitcoin was used for was illegal black market drug transactions...
  - junofan 4y ago
    It’s kind of bad if the SEC is making dumb arguments. They aren’t infinitely powerful; why erode their power this way?
    - customkitchen 4y ago
      ETH is operating and trading with the US. It falls under US jurisdiction. The line of "we are not registered anywhere therefore we don't have to follow laws in any jurisdiction" is pretty weak and farcical. And sorry to be cheeky but... Have you seen some of the absurd claims and arguments crypto people make about the "infinite power" of crypto to somehow evade all laws and solve all social problems, while simultaneously making everyone rich just for holding some tokens? I wish I was making this up, or maybe I was just getting trolled...
71a54xd 4y ago
Is this a joke? This is patently insane - the boneheaded logic behind this is unprecedented. Granted, looks like PoS might be DOA. PoW would've made this kind of draconian tom-foolery much more difficult.
- JohnHaugeland 4y ago
  so i don't mean to seem rude, but, i'm not really sure what other options there are if ethereum isn't bound by us law, is it that they should be bound by someone else's law, or not at all? like, you know that if you're a german person in france, and you make a visa transaction, because visa is an american company, they still have american requirements, right? so i'm not being sarcastic. i'm really genuinely asking. what jurisdiction of law, if any, do you believe governs ethereum?
  - deleted 4y ago
    [deleted]
  - waste_monk 4y ago
    Cryptocurrency folk would have you believe in algorithmic governance / "code is law", and that as a globally decentralised system it should not be subject to any particular national jurisdiction. This is, of course, completely divorced from reality.
    - JohnHaugeland 4y ago
      In fact, I've already received one reply of that form in private.
  - barnabee 4y ago
    I’m pretty on board with John Perry Barlow’s declaration of the independence of cyberspace[0], so I guess my preference would have to be none at all. It seems obvious to me that things can happen online without jurisdiction, just like things can happen in international waters or outer space, and that though these can be governed by treaties or agreements, they cannot usefully be said to occur fully under any one or other jurisdiction. The reality will be more nuanced than the idealised vision of [0], of course, but it will still be profoundly different to the reality that most regulators and governments would like to see, too. (Just like the reality around narcotics bears little resemblance to the world envisaged by the architects of the war on drugs.) How this turns out remains to be seen, but it’s clear to me that the right thing to do is not necessarily for everyone to lie down and take whatever the legislators come up with. Civil disobedience is a powerful force for democratic change. [0] https://www.eff.org/cyberspace-independence https://www.eff.org/cyberspace-independence
JohnHaugeland 4y ago
I'm confused. Is the idea here that something from the United States is not bound by United States law because the person who made it doesn't want it to? Google's also bound by US law. They're also international This is just how the law works. What am I missing? Why does Ethereum get to be above US law?
- yucky 4y ago
  Isn't Google a US company? Ethereum is an open source protocol with an unknown number of applications. I'm not sure this works as an analogy.
  - deleted 4y ago
    [deleted]
  - JohnHaugeland 4y ago
    I'm discussing the law, not an analogy. It's a real system that was made in the United States. You don't have to be a company to be subject to the law. If you make something in a country, it's subject to that country's laws. Think about it: you're basically suggesting that if you call something "a protocol," somehow it's no longer subject to the rule of law. We go through "well yeah but it's not a" every couple of years. The explanations given don't really change anything. Silk Road wasn't a company, and yet it was subject to US law. I see that I'm being downvoted again, even though I'm speaking politely in good faith. :( The truth is, though, as far as I can see, this is legally correct. You can't just sit in a country and ignore its laws and then say "well no, it's an internet thing, the laws don't apply." That isn't how countries work.
    - ouEight12 4y ago
      > It's a real system that was made in the United States Not sure that's true (most of the founder folk appear to be non-US based, and the foundation is Swiss if I'm not mistaken), nor is it what the US Govt is claiming. The SEC appears to be saying "45% of the validator nodes on the network are US based, therefore the transactions happened here, and our laws apply". Which is a horribly bad statistical assumption by an agency that would, one hopes, employ actual mathematicians. I'm far from an ETH fan, more old school BTC myself, but to me, this feels like an exact reminder of why centralization (Even at the country level) is bad, and I can only assume that someone somewhere, who is working on the "next generation of blockchain" just scribbled "GeoIP based node populations limitations/banning" onto their feature roadmap.
twirlock 4y ago
mattwilsonn888 4y ago
> “validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country.” The SEC then concludes: “As a result, those transactions took place in the United States.” I wonder what other legal implications this precedent has (if it holds). I probably won't think of any before hitting send on this comment, but this seems like the type of claim sufficiently disconnected from the reality of how a blockchain network functions (though Gensler has proven competence on the subject) to allow some unintended loopholes or interpretations in other cases.
- jbverschoor 4y ago
  This is also how companies like Optiver 'legally' make 'decisions' in 'other countries' (run some code to execute a transaction on a server somewhere else). If you used mechanical turk, where is the task legally completed? I guess it's just loopholes against loopholes? Gary is a smart guy. He gave some excellent lectures about all this.
- Ekaros 4y ago
  The reverse of this is interesting. IF large number of validators moved out from USA servers. Would then the transactions be outside USA? And would someone track at all times where the majority or validators are? Or likely plurality?
  - peterisza 4y ago
    I agree. They are trying to force an outdated concept. They should adapt faster.
- herbst 4y ago
  When you open an bank account anywhere in Europe you need to specifically sign that your money is not from the US or go through many extra hoops and maybe get a no. I wonder if that is also affected from this.
ETH_start 4y ago
This is going to encourage US-based Ethereum users to stop runnning nodes, and users outside of the US to start running nodes, just to weaken the SEC's outrageous argument. The narrow-minded attempt by the SEC expand its jurisdiction, and by extension, budget, is going to cause long-term harm to US innovation and competitiveness. Another option is for the entire Ethereum network to cloak itself behind an onion-routing network, which given the evident desire by many people to prevent people from using cryptocurrency and force them to submit to centralized regimentation of private financial interaction - even at the expense of basic internet freedoms - may be a prudent step to take.
- boc 4y ago
  I’d make the opposite argument. Losing ETH will allow US devs and companies to work on actual technologies which are useful for society broadly.
  - ETH_start 4y ago
    I assume you're not familiar with the developments in the space, like the growth of stablecoins ($20 billion to $140 billion in two years) and their proliferation across numerous domains and developing economies. This is extremely consequential to US national interests, as at the moment, the USD is the primary collateral backing stablecoins, which means that stablecoins could usher hyper-dollarization as a result of their ability to extend the USD's reach to all corners of the world. More generally, a free market generally works better than the government dictating, on the basis of centralized binding judgments on what is useful, that particular technologies cannot be worked on. The former is consistent with US values and the latter is the province of top-down controlled societies like the PRC. The latter lacks the humility to acknowledge that you may not know everything and you may support the wrong centrally imposed plan on other people.
  - traveler01 4y ago
    What a closed minded take on cryptocurrencies. There are a lot of people in countries where they government fu** up turning around to cryptocurrencies to hold their funds.
deleted 4y ago
[deleted]
SilverBirch 4y ago
Honestly, I think the behaviour of the ethereum devs have led them to an inevitable head on fight with basically every large jurisdiction. You can't build a system that is explicitly designed to process transactions from sanctioned countries and expect that the no one is going to step in. It would be one thing if the devs could answer the simple question of "Who, other than Iran and North Korea need this?", but literally that is the only problem they're solving. The best case scenario is that Ethereum is going to end up as a fragmented cluster fuck where the biggest entities are compliant with US and EU law whilst a small cohort of entities are still helping the North Koreans launder money, or Ethereum caves and the core of their PoS algorithms are changed. And it's not unlikely that along the road to them caving there will be prison sentences. The US government is not going to go "Ah, I see you've found a grey area, let us carefully consider this". It's going to go "Iran. Terrorism. Shut it down."
- DennisP 4y ago
  It's a global p2p network that anyone can join. It's not "explicitly designed to process transactions from sanctioned countries," any more than any other blockchain. It doesn't even have base-layer privacy like zcash or monero.
  - SilverBirch 4y ago
    Their implementation of the Proof of Stake slashing is designed explicitly to prevent the type of censorship that is required to prevent transactions that breach sanctions.
    - DennisP 4y ago
      Slashing only occurs in response to certain specific rule violations. Censorship isn't one of those, and there's no way censorship could be one of those because the protocol doesn't know what's outside of it. To penalize censorship, you'd need to socially organize a hard fork that manually removes the stake of the censors. But you could do that with any proof-of-stake protocol. So then the question is whether the purpose of proof-of-stake in general is to enable social forks against censoring validators. But I think it's pretty clear that the primary purposes of proof-of-stake are to eliminate proof-of-work's absurd carbon impact and to provide more cost-effective security. Ethereum's particular PoS design also enables the scaling methods coming next in the roadmap. Another benefit is more regular block production, which is nice for UI. Meanwhile, PoW is not exactly prone to censorship either. If only 10% of the world's miners are willing to include a transaction, then it will just take 10X longer to get that transaction included. Any miner unwilling to build on blocks containing prohibited transactions is likely to pay an economic cost for that. Finally, it's not clear that sanctions law impacts block producers anyway. OFAC hasn't attempted to enforce sanctions that way, and at least according to Coinbase's chief legal officer, the law clearly doesn't apply to miners or stakers: https://twitter.com/iampaulgrewal/status/1566225955248427008 https://twitter.com/iampaulgrewal/status/1566225955248427008

56 points by yasp 4y ago

This battle was always hanging far off in the fog of the horizon, and now it's coming into the spotlight for primetime. Can technology defeat the bureaucrats of the United States Government? Time will reveal all.

vivab0rg 4y ago
Grabs popcorn
boc 4y ago
If the US government goes to war with crypto, it’s not going to be a long fight. The exodus of corporate capital from the ecosystem will be a fatal blow to crypto prices and projects. Rule number one is don’t fight the IRS.
- aaaaaaaaata 4y ago
  > fatal blow to crypto prices wat? Worse than $900 ETH? Not too sure. > Rule number one is don’t fight the IRS. Google or Twitter search "boating accident"
isitmadeofglass 4y ago
It’s funny that the base assumption is always that all bureaucracy is bad and needs to be demolished. If the same mentality has reigned in the automotive industry proper as it does in the new tech-automotive industry, the concept of crash tests would never had been invented, we’d just put the car on the market and do statistics on how many of the customers died. The concept of phased studies to show efficacy and lack of toxicity in drugs wouldn’t exist. We’d just sell whatever and stop producing the drugs that killed people and focus on the ones that seemed to work in market. The idea that “the consumer chose the product so all responsibility is theirs” is extremely naive and not echoed anywhere else, so why is it that the crypto space seems to feel that they should be completely excerpt of all regulations even as we see constant scams, theft and real, life detailing financial damages pushed onto the consumers who enter into the space in good faith.
- Ebree 4y ago
  I also think banning free choice in shop by regulation is proper saving lives by gradually limiting toxic to human body carbohydrates in food to safest & healthiest level of zero... just after banning me option to buy healthiest human food and my daily meal - meat replacing it with cancerous plant-oil replacement. The safest roads - these where all people drive glass cars or tanks. Regulations as everything should also be decentralised & deglobalised. You don't like law? Go to the region with a different laws restrictions or none. But nobody wants promoting invasion of one option on other making it an authoritarian default. Seatbelts in 99% cases helps in 1% damages you including burning up alive. With full freedom you learn responsibility & create organic institutions to educate others & learn choosing good over bad. When you limit freedom you push people into state of mental disability to evaluate reality on their own & dependency on centralised arbiter. Leaving slave mentality & jump starting own brain takes a while. Often requires generational replacement. I'm all in for full information and detailed labelling, state institutions with objective studies & product stamping. But never for any choice limitation. I want to choose the filters, with option of none, not being forced to use one. I also want democracy with personal voting on each regulation & not being forced to vote for this or that package of things coerced into blindly accepting bulk of things attached to one thing i actually care about to change. Internet supposed to add to our regularly limited choices. What's it's feature and it's curse.

WheelsAtLarge 4y ago

This sounds like bad news but I see it as good news. The only way the SEC can go after fraudsters is to have jurisdiction over what they have done. The SEC can now go after the frauds against Ethereum users no matter where the fraud was committed. Crypto will never be a legitimate investment class if people can't trust that they will get their investment back. It's also impossible for it grow to fill a need without trust. Crypto-Land should be jumping with joy at hearing this news.

deleted 4y ago
[deleted]
customkitchen 4y ago
If you take that angle then crypto will still never be a legitimate investment class either way, because all of it (including BTC and ETH and everything else) is a giant fraud predicated on the falsehood that it is "decentralized" and somehow that makes it unregulated. There is no other reason for it to exist. This is just another nail in the coffin, they can't lie about it anymore. If crypto-land really wants to follow through on their lawless anarchist fantasies, then they should be even happier if the SEC bans all of it outright. Then they can all go back to their roots when the only thing bitcoin was used for was illegal black market drug transactions...
- junofan 4y ago
  It’s kind of bad if the SEC is making dumb arguments. They aren’t infinitely powerful; why erode their power this way?
  - customkitchen 4y ago
    ETH is operating and trading with the US. It falls under US jurisdiction. The line of "we are not registered anywhere therefore we don't have to follow laws in any jurisdiction" is pretty weak and farcical. And sorry to be cheeky but... Have you seen some of the absurd claims and arguments crypto people make about the "infinite power" of crypto to somehow evade all laws and solve all social problems, while simultaneously making everyone rich just for holding some tokens? I wish I was making this up, or maybe I was just getting trolled...

71a54xd 4y ago

Is this a joke? This is patently insane - the boneheaded logic behind this is unprecedented. Granted, looks like PoS might be DOA. PoW would've made this kind of draconian tom-foolery much more difficult.

JohnHaugeland 4y ago
so i don't mean to seem rude, but, i'm not really sure what other options there are if ethereum isn't bound by us law, is it that they should be bound by someone else's law, or not at all? like, you know that if you're a german person in france, and you make a visa transaction, because visa is an american company, they still have american requirements, right? so i'm not being sarcastic. i'm really genuinely asking. what jurisdiction of law, if any, do you believe governs ethereum?
- deleted 4y ago
  [deleted]
- waste_monk 4y ago
  Cryptocurrency folk would have you believe in algorithmic governance / "code is law", and that as a globally decentralised system it should not be subject to any particular national jurisdiction. This is, of course, completely divorced from reality.
  - JohnHaugeland 4y ago
    In fact, I've already received one reply of that form in private.
- barnabee 4y ago
  I’m pretty on board with John Perry Barlow’s declaration of the independence of cyberspace[0], so I guess my preference would have to be none at all. It seems obvious to me that things can happen online without jurisdiction, just like things can happen in international waters or outer space, and that though these can be governed by treaties or agreements, they cannot usefully be said to occur fully under any one or other jurisdiction. The reality will be more nuanced than the idealised vision of [0], of course, but it will still be profoundly different to the reality that most regulators and governments would like to see, too. (Just like the reality around narcotics bears little resemblance to the world envisaged by the architects of the war on drugs.) How this turns out remains to be seen, but it’s clear to me that the right thing to do is not necessarily for everyone to lie down and take whatever the legislators come up with. Civil disobedience is a powerful force for democratic change. [0] https://www.eff.org/cyberspace-independence https://www.eff.org/cyberspace-independence

JohnHaugeland 4y ago

I'm confused. Is the idea here that something from the United States is not bound by United States law because the person who made it doesn't want it to? Google's also bound by US law. They're also international This is just how the law works. What am I missing? Why does Ethereum get to be above US law?

yucky 4y ago
Isn't Google a US company? Ethereum is an open source protocol with an unknown number of applications. I'm not sure this works as an analogy.
- deleted 4y ago
  [deleted]
- JohnHaugeland 4y ago
  I'm discussing the law, not an analogy. It's a real system that was made in the United States. You don't have to be a company to be subject to the law. If you make something in a country, it's subject to that country's laws. Think about it: you're basically suggesting that if you call something "a protocol," somehow it's no longer subject to the rule of law. We go through "well yeah but it's not a" every couple of years. The explanations given don't really change anything. Silk Road wasn't a company, and yet it was subject to US law. I see that I'm being downvoted again, even though I'm speaking politely in good faith. :( The truth is, though, as far as I can see, this is legally correct. You can't just sit in a country and ignore its laws and then say "well no, it's an internet thing, the laws don't apply." That isn't how countries work.
  - ouEight12 4y ago
    > It's a real system that was made in the United States Not sure that's true (most of the founder folk appear to be non-US based, and the foundation is Swiss if I'm not mistaken), nor is it what the US Govt is claiming. The SEC appears to be saying "45% of the validator nodes on the network are US based, therefore the transactions happened here, and our laws apply". Which is a horribly bad statistical assumption by an agency that would, one hopes, employ actual mathematicians. I'm far from an ETH fan, more old school BTC myself, but to me, this feels like an exact reminder of why centralization (Even at the country level) is bad, and I can only assume that someone somewhere, who is working on the "next generation of blockchain" just scribbled "GeoIP based node populations limitations/banning" onto their feature roadmap.

twirlock 4y ago

mattwilsonn888 4y ago

> “validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country.” The SEC then concludes: “As a result, those transactions took place in the United States.” I wonder what other legal implications this precedent has (if it holds). I probably won't think of any before hitting send on this comment, but this seems like the type of claim sufficiently disconnected from the reality of how a blockchain network functions (though Gensler has proven competence on the subject) to allow some unintended loopholes or interpretations in other cases.

jbverschoor 4y ago
This is also how companies like Optiver 'legally' make 'decisions' in 'other countries' (run some code to execute a transaction on a server somewhere else). If you used mechanical turk, where is the task legally completed? I guess it's just loopholes against loopholes? Gary is a smart guy. He gave some excellent lectures about all this.
Ekaros 4y ago
The reverse of this is interesting. IF large number of validators moved out from USA servers. Would then the transactions be outside USA? And would someone track at all times where the majority or validators are? Or likely plurality?
- peterisza 4y ago
  I agree. They are trying to force an outdated concept. They should adapt faster.
herbst 4y ago
When you open an bank account anywhere in Europe you need to specifically sign that your money is not from the US or go through many extra hoops and maybe get a no. I wonder if that is also affected from this.

ETH_start 4y ago

This is going to encourage US-based Ethereum users to stop runnning nodes, and users outside of the US to start running nodes, just to weaken the SEC's outrageous argument. The narrow-minded attempt by the SEC expand its jurisdiction, and by extension, budget, is going to cause long-term harm to US innovation and competitiveness. Another option is for the entire Ethereum network to cloak itself behind an onion-routing network, which given the evident desire by many people to prevent people from using cryptocurrency and force them to submit to centralized regimentation of private financial interaction - even at the expense of basic internet freedoms - may be a prudent step to take.

boc 4y ago
I’d make the opposite argument. Losing ETH will allow US devs and companies to work on actual technologies which are useful for society broadly.
- ETH_start 4y ago
  I assume you're not familiar with the developments in the space, like the growth of stablecoins ($20 billion to $140 billion in two years) and their proliferation across numerous domains and developing economies. This is extremely consequential to US national interests, as at the moment, the USD is the primary collateral backing stablecoins, which means that stablecoins could usher hyper-dollarization as a result of their ability to extend the USD's reach to all corners of the world. More generally, a free market generally works better than the government dictating, on the basis of centralized binding judgments on what is useful, that particular technologies cannot be worked on. The former is consistent with US values and the latter is the province of top-down controlled societies like the PRC. The latter lacks the humility to acknowledge that you may not know everything and you may support the wrong centrally imposed plan on other people.
- traveler01 4y ago
  What a closed minded take on cryptocurrencies. There are a lot of people in countries where they government fu** up turning around to cryptocurrencies to hold their funds.

deleted 4y ago

[deleted]

SilverBirch 4y ago

Honestly, I think the behaviour of the ethereum devs have led them to an inevitable head on fight with basically every large jurisdiction. You can't build a system that is explicitly designed to process transactions from sanctioned countries and expect that the no one is going to step in. It would be one thing if the devs could answer the simple question of "Who, other than Iran and North Korea need this?", but literally that is the only problem they're solving. The best case scenario is that Ethereum is going to end up as a fragmented cluster fuck where the biggest entities are compliant with US and EU law whilst a small cohort of entities are still helping the North Koreans launder money, or Ethereum caves and the core of their PoS algorithms are changed. And it's not unlikely that along the road to them caving there will be prison sentences. The US government is not going to go "Ah, I see you've found a grey area, let us carefully consider this". It's going to go "Iran. Terrorism. Shut it down."

DennisP 4y ago
It's a global p2p network that anyone can join. It's not "explicitly designed to process transactions from sanctioned countries," any more than any other blockchain. It doesn't even have base-layer privacy like zcash or monero.
- SilverBirch 4y ago
  Their implementation of the Proof of Stake slashing is designed explicitly to prevent the type of censorship that is required to prevent transactions that breach sanctions.
  - DennisP 4y ago
    Slashing only occurs in response to certain specific rule violations. Censorship isn't one of those, and there's no way censorship could be one of those because the protocol doesn't know what's outside of it. To penalize censorship, you'd need to socially organize a hard fork that manually removes the stake of the censors. But you could do that with any proof-of-stake protocol. So then the question is whether the purpose of proof-of-stake in general is to enable social forks against censoring validators. But I think it's pretty clear that the primary purposes of proof-of-stake are to eliminate proof-of-work's absurd carbon impact and to provide more cost-effective security. Ethereum's particular PoS design also enables the scaling methods coming next in the roadmap. Another benefit is more regular block production, which is nice for UI. Meanwhile, PoW is not exactly prone to censorship either. If only 10% of the world's miners are willing to include a transaction, then it will just take 10X longer to get that transaction included. Any miner unwilling to build on blocks containing prohibited transactions is likely to pay an economic cost for that. Finally, it's not clear that sanctions law impacts block producers anyway. OFAC hasn't attempted to enforce sanctions that way, and at least according to Coinbase's chief legal officer, the law clearly doesn't apply to miners or stakers: https://twitter.com/iampaulgrewal/status/1566225955248427008 https://twitter.com/iampaulgrewal/status/1566225955248427008