Ethereum faces increasing censorship, Grayscale CEO optimistic after SEC talks, Bitzlato's ex-CEO pleads guilty, and more.
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Ethereum’s Censorship Issue Worsens Due to Sanctions

Ethereum’s Censorship Issue Worsens Due to Sanctions

Date:
Dec 8, 2023
| Issue
#
165

Welcome to the latest edition of Datawallet Daily. As always, we’re focusing on the pivotal stories that have influenced the crypto market over the past 24 hours.

Ethereum’s Censorship Issue Worsens

Ethereum’s network is experiencing increasing censorship, with four of the top five block builders excluding transactions sanctioned by the U.S. government. This rise in censorship, now affecting about 72% of data blocks, contrasts sharply with Ethereum’s original vision as a decentralized, neutral platform. 

The issue intensified following the U.S. sanctioning of Tornado Cash, a privacy mixer on Ethereum. Despite Ethereum’s decentralized nature, most validators now use MEV-Boost, and block builders have significant influence over which transactions are included in blocks. This centralization and censorship pose challenges to Ethereum’s core principles and could impact its future development and neutrality.

Grayscale CEO Optimistic Post SEC Discussions on Bitcoin ETF

Grayscale Investments CEO Michael Sonnenshein expressed optimism about the potential approval of a spot bitcoin ETF following discussions with the SEC. Sonnenshein, speaking on Yahoo Finance, indicated that the SEC’s engagement and questions suggest progress and interest in the matter. 

Grayscale, which has been pushing for the conversion of its flagship bitcoin fund into a spot ETF, gained momentum after a court ruling in August, requiring the SEC to reconsider its application. 

Despite SEC Chair Gary Gensler’s critical stance on crypto, Sonnenshein remains hopeful, emphasizing the growing investor interest and the inevitable evolution of traditional financial institutions to incorporate new technologies like cryptocurrencies. 

Bitzlato Ex-CEO Legkodymov Pleads Guilty in Brooklyn Court

Anatoly Legkodymov, co-founder and former CEO of Hong Kong-based cryptocurrency exchange Bitzlato, pleaded guilty to operating an unlicensed money services business in a Brooklyn court on Dec. 6. He agreed to dissolve Bitzlato and forfeit $23 million in cryptocurrency. Legkodymov’s arrest in Miami on Jan. 17, 2023, was part of an international operation against Bitzlato, which lacked adequate KYC/AML safeguards and supported the Russian darknet marketplace Hydra.

The operation involved multiple countries and Europol, leading to significant asset seizures. Binance, a major counterparty of Bitzlato, blocked and later partially unblocked funds related to the case.

Game Studios Quietly Integrating Blockchain, Avoiding Hype

Game development studios are cautiously integrating blockchain technology into their games while avoiding direct association with Web3. At the Madeira Blockchain 2023 event (Portugal), gaming industry participants discussed the challenges of incorporating blockchain, particularly in gaining acceptance from developers, players, and publishers.

Redcatpig, a Web3 game studio, encountered internal resistance but is proceeding with blockchain features in its upcoming game, HoverShock. The studio focuses on the practical benefits of blockchain, such as true ownership of in-game items, rather than emphasizing the technology’s buzzwords. Similarly, VEU faced backlash for incorporating blockchain but advocates for focusing on product experience over technological jargon.

In Portugal, blockchain is increasingly significant in gaming development and government investment strategies, forming a vital part of the country’s digital economy growth.

Other breaking news

Wrapping Up

Wrapping up today's edition of Datawallet Daily, we delved into crucial developments shaping the crypto world: Ethereum's escalating censorship concerns, Grayscale's optimistic stance following SEC discussions, Bitzlato's legal turnaround with its ex-CEO's guilty plea, and the subtle yet significant shift of game studios towards blockchain technology. Stay tuned for more insights and updates in the ever-evolving landscape of cryptocurrency and blockchain.