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Compliance with OFAC Requirements Dwindling Among Ethereum Blocks

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According to reports, MEV Watch data shows that the proportion of Ethereum blocks meeting the compliance requirements of the Office of Foreign Assets Control (…

Compliance with OFAC Requirements Dwindling Among Ethereum Blocks

According to reports, MEV Watch data shows that the proportion of Ethereum blocks meeting the compliance requirements of the Office of Foreign Assets Control (OFAC) of the US Treasury has dropped to 48%, reaching a three-month low. However, this figure rose sharply to 79% in the two months of November 21 last year. （Cointelegraph）

The proportion of Ethereum blocks meeting OFAC compliance requirements has dropped to 48%

Interpretation of the news:


According to a report, the proportion of Ethereum blocks meeting the compliance requirements of the Office of Foreign Assets Control (OFAC) of the US Treasury has reduced to 48%, marking a three-month low. This implies that fewer Ethereum blocks are complying with the OFAC’s regulatory requirements.

OFAC is responsible for enforcing economic and trade sanctions based on foreign policy and national security goals against targeted foreign countries, regimes, terrorists, terrorists’ groups, individuals, and entities. All US individuals and companies should adhere to these regulations to avoid the consequences of being penalized or observed.

The uncompliant Ethereum blocks have ostensibly not complied with the OFAC’s sanctions policy, which may entail engaging with individuals, businesses, or countries that are prohibited by the US government from participating in financial transactions or doing business with the US.

The declining compliance rate signals possible neglect by Ethereum miners or other users of the network, given OFAC compliance is a precondition for any cryptocurrency-based ecosystem. It also indicates that even with a regulatory framework in place, there may be breaks in the system that can potentially harm the economy and national security.

According to the MEV Watch data, which keeps track of the economic value extracted from miners by including deflationary and reordering incentives on a block-by-block basis, the compliance rate dipped from 79% in the two-month period from November 21. This sudden drop in Ethereum blocks meeting OFAC’s requirements has culminated in the three-month low of 48%.

In conclusion, cryptocurrency users should prioritize compliance with OFAC sanctions policy in their business operations. Also, the government should provide a more comprehensive regulatory framework that provides clear rules to guide cryptocurrency users and ensure that the system is not misused. Finally, the ethereum community and regulators should ensure that the project’s ecosystem abides by globally recognized standards to enhance the system security, regulatory enforcement and close any loopholes.

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