F2Pool, the third largest Bitcoin mining pool, sparked anger on social media after a report that it could be censoring transactions from an address subject to US government sanctions.

Subsequently, ONE of the F2Pool project leaders appeared to confirm the report, which sparked controversy as many Bitcoiners consider “censorship resistance” to be a cardinal principle of the largest and most original blockchain. At the same time, many government officials around the world have expressed concerns that blockchain networks could be used to finance criminal and terrorist activities.

Bitcoin development-focused blogger 0xB10C wrote on Nov. 20 that his “miningpool-observer” project “detected six missing transaction charges from OFAC-sanctioned addresses.” OFAC stands for Office of Foreign Assets Control, a leading agency in the US government's efforts to enforce economic sanctions.

Some of the cases "are probably false positives and not the result of filtering," the blogger wrote.

"However, the missing transactions in F2Pool blocks are likely leaked," according to the article, which was published on the Stacker News website.

Bitcoin mining pool

A Bitcoin mining pool is where operators working to confirm transactions on the network come together to coordinate their efforts and then share the resulting rewards, usually with the goal of providing a more stable income stream.

Because they end up controlling large portions of the network's processing, or "hashing power," their decisions can have wide ramifications. And participants in a mining pool can, with relative ease, switch to a different pool.

F2Pool is responsible for about 14% of Bitcoin blocks mined over the past year, the third most after Foundry USA's 30% and AntPool's 22%, according to data from Blockchain.com.

F2Pool co-founder Chun Wang later posted on Xi Jinping." Isn't that right?" The post has since been deleted.

Chun later wrote that "a censorship-resistant system should be designed to resist censorship at the protocol level, rather than relying on each participant to act conscientiously and refrain from censorship."

"The Internet and TCP/IP have failed on this," he added. "Bitcoin should learn from failure."

A couple of hours after that, Chun tweeted again: "We will be disabling the streaming filtering patch for now, until the community reaches a broader consensus on this issue." The term "tx" is often used as shorthand for "transaction."

'Expect a pullback'

According to the responses to X, the community reaction was quite negative.

"The community has been in agreement about this for a long time. It's not done," one poster wrote.

"Expect adverse reactions," one poster wrote.

Another comment showed the name of the project prominently next to the seal of the US Treasury Department:

https://t.co/bZwY29CIqK

— Nicolas Teterel (@NTeterel) November 22, 2023