EOS BPs Freeze Seven Accounts Without Going Through Arbitration

EOS is facing another controversy just days after its mainnet activation, as the newly elected block producers have recently frozen seven EOS accounts on suspicion of being stolen. However, the backlash started as the block producers did go through arbitration, an integral part of the EOS’s governance system.

In a detailed post, EOS New York noted: “On 17 June 2018, the top 21 Block Producers unanimously agreed to protect property that may have been compromised through phishing attacks or other scams where member’s private keys were compromised.”

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The critics of the project are going crazy with this and are questioning the credibility of the project. Jackson Palmer, the creator of Dogecoin and a well-known personality in the blockchain industry, questioned the very governance process constructed by EOS and the role of EOS Core Arbitration Forum (ECAF).

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

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EOS’s governance structure has been divided into three distinct groups – block producers, arbiters, and token holders. They are synonymous with the executive, constituency, and judicial, of any governed system respectively.

In case of any dispute in the network, the arbitration jumps in to resolve the issue.

However, in this case, the block producers did not go with the arbitration, rather they only consulted with them. The official post noted: “The EOS911 initiative was created by EOS42 as a way to prevent victims of private key theft from having their tokens lost once the 72-hour unstacking period ended following the EOS Mainnet Launch. Once that period ended, the thieves would be free to transfer the tokens wherever they’d like, rendering futile any recourse available to the community at this time.”

“Foreseeing the process that would be required to act, EOS New York, on a call with BPs and BPCs, requested an expedited review of the merits of the case from ECAF (EOS Core Arbitration Forum) who was also on the call. The idea was that if ECAF found merit in the evidence provided, a formal ruling from ECAF would ask the BPs to “freeze” the accounts in question until such time that a thorough and formal review of the claims could be completed,” the post added.

Something fishy?

This is not the first community backlash EOS is facing amid its mainnet activation, as within 48 hours of that, the network froze due to some bug. Although the bug only resulted in a 5-hour network blackout, that is surely not something the team would have anticipated at this stage.

Moreover, days before the mainnet launch, Chinese security firm Qihoo 360 revealed some serious security vulnerabilities on EOS platform which would have equipped any malicious party to remotely take control over all nodes running on EOS.