Mining Giant Will No Longer Hold Its Clients’ Assets in Ethereum! Here’s Why

AntPool, run by mining giant Bitmain, Ethereum (ETH) announced that it will not hold its clients’ assets in ETH after moving to Proof of Stake with the Merge update next month.

Merge will migrate ETH from Proof of Work (PoW) consensus to Proof of Stake (PoS), eliminating the need for transactions to be verified by miners.

AntPool is a mining pool on Ethereum where multiple users can share computing power for mining rewards using computer resources. Antpool deposits users’ mining rewards into their accounts.

“Customer Assets Won’t Be Held on Ethereum Against Possible Censorship Due to US Sanctions”

In a blog post on Saturday, the company said its clients could not hold their assets on the Ethereum 2.0 network and announced a plan to settle with clients before Merge.

After Ethereum’s PoS upgrade, the firm will stop protecting individual client assets mainly due to the “risk of censorship”. This stems from growing concerns that ETH validators may be forced to censor transactions linked to US sanctions on Tornado Cash.

The company said in its statement:

“As ETH 2.0 (The Merge) brings with it the risk of censorship between different countries, ANTPOOL will not be able to hold user’s ETH assets on the PoS chain for the sake of customers’ asset security.”

When Ethereum switches to Proof of Stake, validators will process transactions on the network. However, validators are largely controlled by staking providers.

For example, US-based providers such as Lido Finance, Coinbase, Bitcoin Suisse, Kraken, and staked.us control about 60% of the 416,000 validating nodes in the ETH network.

If staking validators agree to abide by US sanctions, they can start filtering Tornado Cash-related transactions in the initial layer. It is not yet clear whether such censorship will occur as ETH moves to PoS, though.

AntPool has asked its customers to add their own private addresses to their accounts by September 3. The firm will then distribute the accumulated PoW mining payments to private addresses.

*Not investment advice.