Are Bitcoin Miners Filtering Transactions Due to US Sanctions?

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• F2Pool appears to have implemented transaction filtering aligned with US sanctions, as revealed by a recent report
• A Bitcoin developer identified six OFAC-sanctioned Bitcoin transactions intentionally excluded from F2Pool’s blocks.
• This marks the first instance in the industry where a major mining pool incorporates transaction filtering based on US Office of Foreign Assets Control (OFAC) sanctions.

A Bitcoin mining pool appears to be filtering Bitcoin transactions in compliance with US sanctions. A recent report reveals that F2Pool, a major Bitcoin mining pool, implemented transaction filtering based on U.S. Office of Foreign Assets Control (OFAC) sanctions, marking the first instance in the industry. The ‘miningpool-observer’ tool, operated by the pseudonymous Bitcoin developer 0xB10C, identified six Bitcoin transactions from OFAC-sanctioned addresses that F2Pool excluded from its blocks.

Four OFAC-sanctioned Transactions Missing

When it comes to the impact of US sanctions on the crypto world, Bitcoin would normally be considered one of the last bastions of freedom from what many consider unwarranted oppression from nation states. However, it seems that mining pools are taking steps to protect themselves, with miningpool-observer reporting that the absence of four OFAC-sanctioned transactions from F2Pool’s blocks indicates intentional filtering.

F2Pool, as the third-largest Bitcoin mining pool, holds significance, contributing to 13.7% of all mined blocks in the past year. Although this single pool’s actions don’t disrupt the overall functioning of the Bitcoin network, concerns will arise due to the potential impact on censorship resistance if F2Pool, which originates from Asia, continues filtering sanctioned transactions.

“Transaction Filtering Patch” Comment Deleted

F2Pool co-founder Chun Wang announced the deactivation of the “transaction filtering patch” on X until the community reaches a more comprehensive consensus on the matter, raising questions about potential future occurrences. However, the post has now been deleted, suggesting that Wang erred when he made those comments.

The move to censor Bitcoin transactions, which will reignite the debate over legal compliance vs. freedom from government interference, may have something to do with the forthcoming crypto element of the Infrastructure Bill in 2024, which has the potential to classify mining pools as brokers in the US. This would require registration with various financial bodies and adherence to money laundering rules.