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Anonymous Leak Hit EOS With Corruption Allegations

Fredrik Vold
Last updated: | 1 min read

In what appears to be a new turn of events for the controversy surrounding EOS blockchain developer, the firm now finds itself fighting back against allegations that influential Chinese groups are colluding to control its blockchain.

Source: Twitter

An anonymous source last week supposedly leaked an internal document claiming that “collusion, mutual voting, and pay-offs” is a common practice among block producers in the EOS network, TheNexWeb (TNW) reported. Chinese cryptocurrency exchange Huobi was further mentioned as one of the main actors behind the voting corruption.

According to the report, Huobi and other major block producers allegedly vote for each other in an effort to retain their status within the network, as well as securing their income streams. Further, Huobi reportedly receives EOS tokens in exchange for voting on others.

Huobi denies any “financial business” with the other nodes on the network, a tweet from Chinese crypto news source cnLedger said, referencing a statement from the company (in Chinese). CEO Brendan Blumer said in a public statement on Monday that “we are aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims.” Blumer further added that he remains “very optimistic about the future of the EOS public blockchain […]”

The model used by EOS is a consensus model known as “Delegated Proof-of-Stake,” which means that those who are heavily invested in the project also gets more voting power in deciding who gets to mine EOS. Huobi’s EOS mining pool is currently the third most powerful block producer, and is rewarded with EOS tokens worth approximately USD 4,700 per day, according to TNW.

“In general, what EOS already brought is this massive social experiment to the world. You can think of it as a global borderless democracy thing happening across the world with voting politics (possibly even vote buying), with global consensus, with disputes and issues, with many solutions to one problem <…>,” Vytautas Kašėta of EOS Lithuania, a block producer candidate, told earlier this year.

EOS has seen its price drop sharply since its peak in late April this year. At its all-time high, EOS traded at more than USD 20 per token, but is now down to a level of around USD 5.7, a decline of about 75%.