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News

Coinbase May Add Customer’s Ethereum Stake To Blacklist If Necessary

September 14, 2022 - Around 2 mins mins to read
The blacklist function in the Coinbase Wrapped Staked ETH (cbETH) smart contract has sparked criticism from some in the crypto community.
Coinbase May Add Customer's Ethereum Stake To Blacklist If Necessary

As observed in the smart contract, the Coinbase Wrapped Staked ETH (cbETH) features a blacklist function. This enables Coinbase to selectively block addresses if necessary.

If the exchange believes the wallet has violated its user agreement, it can blacklist addresses and freeze customer assets if it believes there has been a violation or if the law mandates it.

Coinbase is not the only cryptocurrency firm that blacklists addresses. Circle has also seized funds associated with the mixing service Tornado Cash. The corporation froze 75,000 USDC belonging to customers of the Ethereum mixer.

Coinbase May Add Customer's Ethereum Stake To Blacklist If Necessary

Some Bitcoin holders are irritated by the move, believing that it sets a terrible precedent. Meanwhile, Coinbase has been committed to following the law and complying with any orders issued by regulators.

Some in the crypto community pointed to previous comments made by Coinbase CEO Brian Armstrong when they criticized censorship. In August 2022, Armstrong said that they would likely shut down the staking service instead of censorship if regulators required censorship. This raised concerns among customers staking Ether on the exchange.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.