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- Bitcoin miners are under increasing pressure to monitor the transactions they process and filter out those connected to addresses with criminal ties.
- Major mining pools filtering transactions from sanctioned addresses would mean a whole new era for Bitcoin, with protocol-level censorship.
Bitcoin miners declining to process transactions for sanctioned addresses is a rare occasion now, but there's a risk that it could become common practice in the future as regulatory pressure on the industry increases.
U.S. regulators have their eyes on crypto, and even if miners are not in the crosshairs right now, there are reasons for them to be cautious, according to Ben Hutten, a partner at law firm Orrick.
“If miners are providing services to people on the [sanctions] list, that could be deemed by OFAC to be materially supporting a sanctioned person, and it could be a basis for the imposition of sanctions on the service provider,” Hutten told The Block, referring to the Office of Foreign Assets Control.
Christopher Bendiksen, bitcoin research lead at CoinShares, shared this view and said he believed some miners would ultimately start to censor transactions connected to addresses on the OFAC list, "and that will be a cost of business in the West for them."
