U.S. banks reported an alarming increase in unrealized losses and a growing list of institutions at risk of failure in the first quarter of 2024, according to the latest U.S. Federal Deposit Insurance Corporation (FDIC) data. The FDIC report highlights 7 billion in unrealized losses and identifies 63 banks as vulnerable, marking a concerning uptick […]
Bitcoin News
Bloxroute to Reject Blocks With OFAC Flagged Transactions
Bloxroute, a company that provides relaying services, has declared that it will start rejecting block bids with transactions from wallets part of the Office of Foreign Assets Control (OFAC) Specially Designated Nationals And Blocked Persons List (SDN List). Based in the U.S., the company clarified it is still committed to supporting Ethereum’s decentralized nature.
Bloxroute to Comply With OFAC SDN List Designation
Bloxroute, a company that provides relaying services for Ethereum and other networks, has reported that it will start rejecting block bids with transactions coming from wallets part of the Office of Foreign Assets Control (OFAC) Specially Designated Nationals And Blocked Persons List (SDN List).
Based in the U.S., Bloxroute stated it will still support Ethereum’s decentralized and permissionless traits while “maintaining compliance with our legal jurisdiction.” Before, Bloxroute only applied OFAC rules to its “regulated” relay, while its “max profit” relay propagated all available transactions.
In its announcement, Bloxroute declared:
Ethereum is unstoppable, permissionless, and anti-fragile because it’s decentralized and globally distributed, and not easily affected by any single entity, even if it has the best networking tech.
While the company believed this would hurt its performance, this has not happened. The performance of Bloxroute’s two different relays has been solid, being involved in more than 45% of the payloads during the last 24 hours.
Several corporate validators based in the U.S. also run OFAC-compliant relays. According to MEV Watch, 42% of the blocks produced after Ethereum’s merge have been OFAC compliant, contributing to a form of protocol-level censorship policy.
Nikita Zhavoronkov, the lead developer at Blockchair, explained how this compliance issue, prompted by institutions entering crypto, could evolve to affect the network operability of several chains.
He stated:
Once 51%+ are compliant, there’s a high chance we’ll be mere months away from the miner majority beginning to orphan blocks containing sanctioned transactions.
Zhavoronkov detailed that in this hypothetical future, privacy coins such as Monero could shine due to their fungibility characteristics and the impossibility of miners censoring transactions.
What do you think about Bloxroute’s policy change to become fully OFAC compliant? Tell us in the comments section below.
Bitcoin Vulnerability Discovered By A Developer Has Been Flagged By The US Government
Last week, a Bitcoin developer Luke Dashjr raised alarm about a possible vulnerability in the network in relation to the Bitcoin Ordinals that could lead to a code exploit. After posting his findings to social media, Dashjr’s warnings were not taken seriously as community members believed it was a non-issue. However, the US government seems to be taking the vulnerability seriously, adding it to its vulnerability database.
Dashjr’s Finds Vulnerability In Bitcoin Network
Dashjr had first raised alarm about the bug in the Bitcoin network on December 6 through an X (formerly Twitter) post. As the developer explains, this bug was related to the BTC Inscriptions which have gained popularity in the last year. This capability has helped developers to create what could be referred to as Bitcoin’s version of non-fungible tokens (NFTs).
Elaborating on the mechanism of Ordinals, Dashjr explained that the Inscriptions were actually taking advantage of a vulnerability in the Bitcoin Core. Developers are able to hide their data as program code, thereby being able to bypass the preset limit on the size of extra data that can be included in BTC transactions.
Dashjr explained that he was working to fix this issue. However, the vulnerability remains as developers are still able to create inscriptions on the network. Even after being fixed in the “Bitcoin Knots v25.1,” the developer explains that the vulnerability still remains “in the upcoming v26 release.” As for when the vulnerability might be completely fixed, Dashjr said he hopes this will happen sometime in 2024.
As Bitcoinist reported, not everyone in the community agreed that this was actually a vulnerability. Some worried that if the ‘vulnerability’ is eventually fixed, Ordinals and BRC-20 tokens would disappear, to which Dashjr responded in the affirmative.
NIST Adds BTC Bug To Vulnerability List
Despite the Bitcoin community not taking the warning of the vulnerability seriously, the United States government has chosen a more proactive approach. The National Vulnerability Database which is under the government agency, the National Institute of Standards and Technology (NIST), has moved forward to add the vulnerability to its Vulnerability List under ‘Common Vulnerabilities and Exposures.’
The agency has assigned the vulnerability with the code CVE-2023-50428 after identifying that it could be a potential risk for the network, especially when it comes to security or integrity. This means the agency believes this could lead to an exploit in the Bitcoin network.
The very existence of Ordinals and BRC-20 tokens is already identified as one of the ways that this vulnerability is already being exploited. Naturally, the agency is looking to prevent other ways in which the vulnerability could be further exploited in a way that could cause harm to its users.
OFAC’s Sanction Bucket Grows: BTC, TRX, and ETH Addresses Flagged Over Fentanyl Ties
The Office of Foreign Asset Control (OFAC) under the Treasury has released an updated version of the specially designated nationals (SDN) list, featuring multiple alleged fentanyl traffickers from China along with their associated cryptocurrency addresses. These highlighted crypto addresses are connected to decentralized networks such as Bitcoin, Ethereum, and Tron.
OFAC Targets Chinese Fentanyl Traffickers; Sanctions 17 Crypto Addresses
Continually broadening its database of crypto addresses linked to potential wrongdoers, OFAC identified 17 new addresses on October 3, 2023. Associated with blockchains like Bitcoin, Ethereum, and Tron, as well as digital assets like tether (USDT), these addresses were linked to a network of fentanyl suppliers primarily located in China but also connected to entities in Canada.
Chainalysis published a report on the topic, revealing that the addresses collectively received “.8 million worth of cryptocurrency.” Several individuals, including Bahman Djebelibak, Shen Xianbiao, Wang Jiantong, Zhang Wei, Xia Fengbing, and Wang Mingming along with the Canada-based company Valerian Labs, were sanctioned by OFAC.
According to Chainalysis’ study, Fengbing managed the crypto addresses for an organization called Jiangsu Bangdeya New Material Technology. The firm’s Reactor software found that the sanctioned addresses also had ties to numerous “mainstream exchanges.” Furthermore, a considerable portion of funds originated from darknet markets. This update follows OFAC’s recent sanctions on several BTC addresses allegedly related to Iran-linked ransomware activities.
In addition to the OFAC sanctions, the U.S. Department of Justice (DOJ) announced eight indictments against the ring of fentanyl, methamphetamine, and precursor chemical dealers. The indictments target the string of companies and individuals for openly advertising illicit chemical sales and using techniques to evade law enforcement. “We know that the global fentanyl supply chain, which ends with the deaths of Americans, often starts with chemical companies in China,” Attorney General Merrick Garland said.
What do you think about OFAC flagging 17 crypto addresses? Share your thoughts and opinions about this subject in the comments section below.
Bittrex North Korean Accounts Flagged by NYDFS Were South Korean
Crypto exchange Bittrex says New York regulators erred in identifying two of its users as North Korean.
CryptScout #BitFeed RSS – Bitcoin and Cryptocurrency News 24/7