Ignoring all the obvious jokes here about banking without regulations and throwing good money after bad, I'm interested in the technical aspect of such bans and had some trouble finding resources. The author says "blocked by DeFi protocols such as AAVE and Uniswap." What does this actually mean? I found Uniswap's FAQ on this ( https://help.uniswap.org/en/articles/6149816-address-screeni... ), but I'm not sure what it means to be a blocked address. Is it just that certain companies won't execute transactions directly with those addresses? Is the author somehow prevented from trading their ETH?
It's the UI being blocked so far. My understanding is that they use APIs from companies like https://www.trmlabs.com/ to decide if a wallet is dirty but the algorithm right now is deeply flawed.
Just wait until staking is merged, 67% of the pools are run by centralized companies wanting to do business in the US, and they start filtering at the transaction level, including or not in blocks based on these same dirty metrics.
Lots of people who became paper rich are going to go the other direction just as fast.
If they filter transactions, ETH will become worthless, causing the relevant stakers to lose all their money since by definition they are the ones with the most money.
Seems like the system will punish censorship as designed.
They will be the majority though, enough to choose the history of the ledger, it's more that they won't allow other validators to join the network, who could invalidate their choices. Thus, the penalties will not be applied.
How does ETH do to stop miners from rejecting or preferring transactions for blocks today? Pretty sure there have been some interesting stories about transaction front running and other tactics to abuse the system for personal gain (which is a fundamental issue in the unregulated blockchain ecosystem)
The penalties are outside of the network. The penalties are that nobody wants to use a cryptocurrency with transaction filtering, when there are so many without it. Thus, the real-world value of the network token decreases drastically.
> If they filter transactions, ETH will become worthless
I'm not sure about that. Some hodlers of ETH might be fine with governments being able to censor transactions. In that case what will determine the price of ETH is also how much of it these people own.
True, but I could envision a scenario in which someone working for the government might interpret his actions as bypassing measures put in place to enforce a sanction. Regardless of how valid or invalid it was for his account to be blocked in the first place.
Typical implementation is money can go in, but can't come out til the sanction is lifted. Sorry bout it.
You won't find much on the technical implementation, because the sector as a rule keeps the implementation details generally under wraps. The intent is clear however. Lock as much of their financial resources in a sanctioned account as possible.
> Interestingly, in the end I was able to withdraw all my funds from AAVE through direct contract calls as illustrated above
Will this just result in the next wallet being tainted, and so on? I guess maybe you can try to cash out the crypto before whoever you're selling to catches on?
> Interestingly, in the end I was able to withdraw all my funds from AAVE through direct contract calls as illustrated above. So basically the web UI is blocked but people can still use AAVE by sending transactions to the blockchains directly.
The only thing that was censoring his transactions was the website, which is centralized by design.
Basically, the "sanction preventions" Aave is instituting are for show only, in hopes they fool the regulators. They'll annoy and disturb the casual crypto trader but will do nothing to stop the big criminals from money laundering. I hope the developers of these defi lending protocols get hit with the criminal charges next.
When the "artists" have been openly and shamelessly stating, since around 2009, that the entire purpose of their "art" is to aid in laundering money and other crimes? Yes, absolutely.
Being able to make a transaction does not mean you are not subject to them, just that you found a workaround and probably earned yourself a spot on a list. They can still take your freedom
The big question is whether validators who process sanctioned contract transactions on chain are liable. I would say they are, since in theory they can choose which transactions to include. If I were a US based miner I'd be looking into it. (not that I agree but it seems the trend is more enforcement, not less, over time)
Part of the blame goes to etherscan for trying to be a gatekeeper. In 2016 it used to just be a transaction explorer, now it,s trying to determine what is legal or not.
> Interestingly, in the end I was able to withdraw all my funds from AAVE through direct contract calls as illustrated above. So basically the web UI is blocked but people can still use AAVE by sending transactions to the blockchains directly.
I'm not saying Monero will crash and nobody will use it if it gets sanctioned, but just like ETH coming from Tornado Cash is considered tainted the same could apply to all Monero.
I have nothing positive to say about this article.
I giggled a little at reading it... A dude with way more money than brains is mad that "decenteralized finance" is decenteralized and can do whatever they want?
The guy then admits to losing a quarter of a million; you'd think that'd be enough of a penalty for him to realize that maybe he should take his remaining money out, but nope.
Gee. Who could've imangined that there's logical reasons for most financial regulations?
There are lots of people with a lot of money in the old banking system who are not tech savvy. They are routinely defrauded and affected by 3rd party fraud. Still, it doesn't warrant labeling them as "having more money than brains".
In the case of the article, this is someone who had some money in a centralized exchange (AAVE) which was hacked by a bad actor, and then the breadcrumbs were traced to the sanctioned TornadoCash accounts.
My dad just sent the money form his account on his bank after some scammer called him (saying that he was a bank officer) and convinced him that his bank account was hacked, and he needed to move his money to another account in a different bank. Needless to say, it was all a scam.
Hearing and reading it looks pretty obvious... I do think he is a victim.