Tezos
$0.46107 1.49%
EOS · 18w

EOS Voter Collusion Scandal Highlights Issues Of Trust And Governance

In what looks like it could be a blow to one of its key founding protocols, decentralization, the cryptocurrency recently become embroiled in a scandal based on alleged collusion between an Asian cryptocurrency exchange and voters for EOS block producers. Reports have emerged that the fifth most popular cryptocurrency by market cap, valued at nearly $5.4B at time of writing, was in hot water over accusations that the Singapore-based Huobi exchange may have tried to help itself and some other block producers gain votes that would enable them to manipulate and control the verification process for EOS's proof-of-stake system.

In late September, Twitter user Maple Leaf Capital tweeted:

"Recently, an internal excel document from Huobi (one of the BPs [block producers]) is circulating in the Chinese community. This file documents the collusion, mutual voting, and pay-offs that occur amongst the Chinese BP community. I'm working on getting the file."

For those unfamiliar with the term BP, block producers are meant to be the decentralized entities that govern the EOS blockchain as well as produce the actual digital blocks that make up the cryptocurrency's blockchain. The accusation claims that Huobi voted for 20 specific block producers and in return, 16 of them voted for Huobi.

Huobi has denied the claims:

“Based on the initial investigation, there were no financial contracts involved between Huobi and any third party. The investigation is still on-going and therefore, we seek your patience and co-operation in this matter.”

Not long after the EOS news broke, Apple quietly removed an allegedly malicious cryptocurrency wallet, EOSIO Wallet Explorer, from its App Store, after some users complained that their EOS tokens had been stolen after they used the app.

Despite the negative news, EOS continues to trade in the $5.8 range.

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