Another controversy regarding EOS came to light this week when the fourth largest crypto had seven of its accounts frozen by the 21 block producers. The action was taken under suspicion of theft after it was discovered that half of EOS coins were being held by only 10 wallets.
EOS has had quite a difficult period lately, being the subject of several controversies. The latest one happened only days ago when the 21 BPs (Block Producers) decided to freeze EOS’s accounts without consultation. The seven accounts that were frozen are suspected to be in possession of stolen cryptos, and the action itself is part of an initiative called EOS 911.
EOS 911 is a safety protocol that is used in case of an emergency. A large theft falls under this category and the move was made even though it represents the violation of EOS constitution’s own rules. According to the rulebook, the block producers are not supposed to be the ones who make such a decision, they are there in an executive capacity only.
In this case, the decision was to be made by ECAF (EOS Core Arbitration Forum), and ECAF decided that freezing the accounts was not necessary, stating that they do not have the authority to order such a thing. As a result, the BPs took action themselves, and the accounts were frozen on June 19th.
We have pledged to abide by, without delay, any valid arbitration order. We recognize this as valid and will continue to honor the instructions provided by ECAF. The accounts in question will remain “frozen” until such time that ECAF orders another course of action. pic.twitter.com/kGuImMCbwp
— EOS New York (@eosnewyork) June 19, 2018
EOS faces major criticism
In EOS a few complete strangers can freeze what users thought was their money. Under the EOS protocol you must trust a "constitutional" organization comprised of people you will likely never get to know. The EOS "constitution" is socially unscalable and a security hole. https://t.co/WusEqBMGBp
— Nick Szabo⚡️ (@NickSzabo4) June 19, 2018
Several individuals connected to the crypto space criticized the decision, including Dogecoin’s founder Jackson Palmer and Nick Szabo, a cryptographer and computer scientist.
To be clear (and not accused of "FUD"), what happened here is that they froze the accounts with agreement from the other block producers *before* the ECAF (EOS Core Arbitration Forum) had issued a decision.
Why have the ECAF or a "constitution" if that's how things are done?
— Jackson Palmer (@ummjackson) June 19, 2018
Even more criticism hit the alleged decentralization of immutability of EOS’ blockchain, which should not make it possible for the BPs to just organize a meeting and decide something like this.
The almighty "Block Producers" of EOSio freeze 7 EOS accounts and will recover any lost funds due to phishing or scamming.https://t.co/soriVnCr94
What on earth kind of a shitcoin is this thing
— Whalepool (@whalepool) June 18, 2018
The Bitcoin Foundation’s founding member, Charlie Shrem, stated that the immutability is essential, despite the fact that it might harm the crypto itself. Otherwise, the whole concept of cryptos is lost.
“Protecting” “punishing”. No. No one gets to decide those things. You are hair swapping 1 nation state for another one, albeit a digital one. This is the point of crypto, no one should have that power. If you do, then we should just stop wasting everyone’s time. https://t.co/yCh6IIPGqp
— Charlie Shrem (@CharlieShrem) June 18, 2018
So, even though the BPs’ motivation was one of security, this action has clearly demonstrated where the power lies, which is not something that the community is willing to accept. This is not even the first controversy surrounding EOS this month. The previous one came barely over a week ago when the crypto launched its MainNet, which was then forced down due to a glitch.
June 2018 has not been kind to EOS, and the crypto and its team appear to have made several bad calls. The consequences of the controversies have yet to be fully determined and it might take a lot to calm down EOS’ community after this fiasco.