In light of the recent ban on crypto mixing tool Tornado Cash and the subsequent arrest of the Tornado Cash developer, there has been a growing debate around what crypto services providers would choose between decentralization and censorship in form of compliance.

The question has become more prominent as Ethereum (ETH) is moving from its current proof-of-work (PoW) blockchain to a proof-of-stake (PoS) mining consensus. With the transition less than a month away, a user pointed out that more than 66% of validators on the Beacon chain (Ethereum PoS chain) will adhere to the United States Department of the Treasury's Office of Foreign Assets Control (OFAC) regulations.

Start with the big, current one. Currently it looks like over 66% of the beacon chain validators will adhere to OFAC regulations, @LidoFinance @coinbase @krakenfx @stakedus @BitcoinSuisseAG pic.twitter.com/qyq23tPnqV

When asked whether Coinbase and others would choose to adhere to compliance requests and impose protocol-level censorship or shut down staking services, Brain Armstrong, the CEO of Coinbase, chose the latter. Armstrong said:

First group of centralized #ethereum validators to answer my question say they would rather wind down their staking program than enable on-chain censorship at the protocol level in the ethereum blockchain. https://t.co/pKG8X50hDa

There was growing speculation about the actions of Coinbase, Kraken, and other prominent crypto exchanges who are also key ETH validators on the Beacon chain.

Related: Tornado Cash ban could spell disaster for other privacy protocols — Manta co-founder

Many believed that centralized crypto exchange would take the easy way out and impose protocol-level censorship rather than block individual transactions