EOS, the cryptocurrency whose multi-billion-dollar blockchain recently went live, is currently embroiled in controversy as the EOS Core Arbitration Forum (ECAF), a body set up to resolve community disputes, recently ordered its 21 Block Producers (BPs) to freeze 27 accounts.
The move, which came through an “Emergency Measure Protection Order,” directed the block producers to stop processing transactions from the 27 accounts, and notably didn’t explain why, as it claimed “the logic and reasoning for this Order will be posted at a later date.”
The authorities in EOS just instructed the block producers to censor transactions from 27 accounts with no reasons given.
“the logic and reasoning for this order will be posted at a later date”
— Ferdous ฿hai (@ferdousbhai) June 22, 2018
The Order, dated June 22, was signed by Sam Sapoznick, in the capacity of interim emergency arbitrator. This isn’t the first time EOS’ block producers were ordered to freeze accounts, as a few days ago they had to freeze 7 accounts associated with scams.
While it isn’t clear why the freeze on these 27 accounts was now ordered, various users believe they’re associated with phishing scams that took advantage of users when it was still unclear how to vote, before the cryptocurrency’s mainnet went live.
It’s worth noting EOS’ approach to governance is new in the crypto space. The network is designed to deal with a high transaction throughput, and as such doesn’t use bitcoin’s proof-of-work (PoW) consensus mechanism.
Instead, it uses a delegated proof-of-stake (DPoS) consensus mechanism, that sees holders vote to elect 21 block producers, which are responsible for maintaining the network. Seemingly, this gives them power to censor transactions and freeze accounts.
As some critics pointed out, this move questions EOS’ decentralization, as a group of entities has the power to freeze accounts without even giving the community a proper explanation as to what is going on. Supporters, on the other hand, note that it’s good to weed out bad actors.
Some critics compared the move to civil asset forfeiture, which sees law enforcement seize private property based on the suspicion that a crime has been committed. These types of moves make it clear EOS is unlike Bitcoin, which some argue rose to prominence because of its decentralized, permissionless, censorship-resistant nature.
Industry veteran Charlie Shrem slammed ECAF’s supporters who argued the move was necessary for mass adoption on Twitter, arguing that if someone has the power to freeze accounts and control others’ money, then mass adoption isn’t desirable.
If crypto mass adoption involves someone having the power to control, freeze or reverse a transaction.
If it involves someone having the power to edit or reverse data on the chain.
If it involves losing immutability.
Then crypto mass adoption is not worth having. https://t.co/RRHuZKattE
— Charlie Shrem (@CharlieShrem) June 19, 2018
At press time, it’s unclear whether the 21 EOS block producers – one of which is cloud mining company Genesis mining – will comply with the order and freeze the accounts.