Stablecoin censorship - page 2. | Bitcointalksearch.org

Xal0lex

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Quote from: Fundamentals Of on October 16, 2023, 09:38:19 PM

Quote from: Xal0lex on October 16, 2023, 03:05:32 PM

Quote from: Blitzboy on October 16, 2023, 07:40:44 AM

Stablecoin censorship? These issuers seem to have missed the idea of cryptocurrency. This behavior by Bitfinex and Circle is incomprehensible. What do they offer if they mimic bank restrictions? Dont you see the obvious contradiction?

Question the narrative being promoted. Why are investors buying stablecoins that seem to betray decentralization? Wheres the autonomy if every transaction and move is monitored? Its like receiving a golden cage. Though dazzling and tempting, its still a cage. Rise up, crypto community, and demand more from issuers. Otherwise, why bother?

There is no contradiction. These companies offer the services for which there is a demand. Crypto users have a great demand to link cryptocurrencies and fiat. Fiat with cryptocurrency will never have a decentralized union, it's nonsense. The crypto community itself is to blame for the industry moving towards centralization. Because for most crypto users, the main idea of using cryptocurrencies is to exchange cryptocurrency for fiat as profitably as possible.

I agree. There is no contradiction. To remove censorship is a Bitcoin idea. But crypto has since grown in all directions, with a wider scope. Bitcoin is crypto, but crypto isn't Bitcoin. The growth of crypto didn't necessarily abide with the fundamental ideas of Bitcoin. The mere fact that crypto has produced a coin that represents fiat isn't what Bitcoin is all about.

If there is any contradiction, it is that the very people who claim to be pure and solid Bitcoin supporters are also using stablecoins like USDT and USDC that are centralized and actively censor their users.

Bitcoin is also trying to be censored. This is manifested in various AML checks, which are used by various services to fight, allegedly, against fraud. In the framework of P2P transactions it does not change anything, but we want bitcoin to be able to pay not only between users, but also to buy various goods and services in stores and on websites. In this respect, censoring bitcoin is possible because there is also a third party in this financial relationship, in the form of payment processors that have their own regulators and rules.

Abiky

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Quote from: GreatArkansas on October 15, 2023, 11:03:18 PM

This banned or stablecoins being frozen are common in some hacking incidents. Like in any centralized entities or even DeFi entities we have now in the cryptocurrency market.
It's just sad because the essence of cryptocurrency is being disregarded here, let's say for example if you are just normal person and your funds just got frozen without any doings, then it means you really don't own your cryptocurrency.

Having a centralized stablecoin that's prone to censorship, certainly does not go well with crypto/Blockchain tech's core ethos. I can't imagine how disastrous it would be to combine such a stablecoin with "De-Fi". It's like bringing banks to the Blockchain. This introduction of a middleman or third-party, greatly brings us the single point of failure from centralized systems. Most people don't care about this because they only want to make money fast.

As I always say, convenience goes on top of everything else. I hope we get more decentralized alternatives to help make "De-Fi" truly censorship-resistant. Otherwise, crypto will be doomed to failure. The future is widely unpredictable, so we can only hope for the best. Just my opinion

Fundamentals Of

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Quote from: Xal0lex on October 16, 2023, 03:05:32 PM

Quote from: Blitzboy on October 16, 2023, 07:40:44 AM

Stablecoin censorship? These issuers seem to have missed the idea of cryptocurrency. This behavior by Bitfinex and Circle is incomprehensible. What do they offer if they mimic bank restrictions? Dont you see the obvious contradiction?

Question the narrative being promoted. Why are investors buying stablecoins that seem to betray decentralization? Wheres the autonomy if every transaction and move is monitored? Its like receiving a golden cage. Though dazzling and tempting, its still a cage. Rise up, crypto community, and demand more from issuers. Otherwise, why bother?

There is no contradiction. These companies offer the services for which there is a demand. Crypto users have a great demand to link cryptocurrencies and fiat. Fiat with cryptocurrency will never have a decentralized union, it's nonsense. The crypto community itself is to blame for the industry moving towards centralization. Because for most crypto users, the main idea of using cryptocurrencies is to exchange cryptocurrency for fiat as profitably as possible.

I agree. There is no contradiction. To remove censorship is a Bitcoin idea. But crypto has since grown in all directions, with a wider scope. Bitcoin is crypto, but crypto isn't Bitcoin. The growth of crypto didn't necessarily abide with the fundamental ideas of Bitcoin. The mere fact that crypto has produced a coin that represents fiat isn't what Bitcoin is all about.

If there is any contradiction, it is that the very people who claim to be pure and solid Bitcoin supporters are also using stablecoins like USDT and USDC that are centralized and actively censor their users.

Xal0lex

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Quote from: Blitzboy on October 16, 2023, 07:40:44 AM

Stablecoin censorship? These issuers seem to have missed the idea of cryptocurrency. This behavior by Bitfinex and Circle is incomprehensible. What do they offer if they mimic bank restrictions? Dont you see the obvious contradiction?

Question the narrative being promoted. Why are investors buying stablecoins that seem to betray decentralization? Wheres the autonomy if every transaction and move is monitored? Its like receiving a golden cage. Though dazzling and tempting, its still a cage. Rise up, crypto community, and demand more from issuers. Otherwise, why bother?

There is no contradiction. These companies offer the services for which there is a demand. Crypto users have a great demand to link cryptocurrencies and fiat. Fiat with cryptocurrency will never have a decentralized union, it's nonsense. The crypto community itself is to blame for the industry moving towards centralization. Because for most crypto users, the main idea of using cryptocurrencies is to exchange cryptocurrency for fiat as profitably as possible.

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Quote from: Husires on October 14, 2023, 08:13:37 PM

you can losing your entire balance, as happened with LUNA,

Yes, I know that, but our discussion focuses on censorship, not the potential loss of value due to the badness of the stablecoin company itself.

Quote from: Husires on October 14, 2023, 08:13:37 PM

-snip-
These are opposite things. If the stablecoin has a large market capacity, regulatory restrictions will increase on it, which may mean freezing even small deposits, and the stablecoin with a small market capacity does not have enough reserves to maintain the value of one dollar.

Currently the total daily market cap of stablecoins has reached $123k billion, if we assume the number of retail users increases rapidly from today, I think the opposite is true, censorship is increasingly difficult to do for small values.

Blitzboy

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Stablecoin censorship? These issuers seem to have missed the idea of cryptocurrency. This behavior by Bitfinex and Circle is incomprehensible. What do they offer if they mimic bank restrictions? Dont you see the obvious contradiction?

Question the narrative being promoted. Why are investors buying stablecoins that seem to betray decentralization? Wheres the autonomy if every transaction and move is monitored? Its like receiving a golden cage. Though dazzling and tempting, its still a cage. Rise up, crypto community, and demand more from issuers. Otherwise, why bother?

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Quote from: GreatArkansas on October 15, 2023, 11:03:18 PM

This banned or stablecoins being frozen are common in some hacking incidents. Like in any centralized entities or even DeFi entities we have now in the cryptocurrency market.
It's just sad because the essence of cryptocurrency is being disregarded here, let's say for example if you are just normal person and your funds just got frozen without any doings, then it means you really don't own your cryptocurrency.

Well, besides BTC there are not so many currencies that are fully in your hands.

GreatArkansas

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This banned or stablecoins being frozen are common in some hacking incidents. Like in any centralized entities or even DeFi entities we have now in the cryptocurrency market.
It's just sad because the essence of cryptocurrency is being disregarded here, let's say for example if you are just normal person and your funds just got frozen without any doings, then it means you really don't own your cryptocurrency.

Fundamentals Of

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USDT and USDC are the two most notorious when it comes to stablecoin censorship. Ironically, they're also the two largest stablecoins in cryptocurrency. They're the easiest to use because they're accepted almost everywhere. This is also the reason why I used them many times even if I don't really like them for the reason that they easily freeze funds.

DAI is a better option but not as popular as them. There will definitely come a time when these censorship issues will make users realize how risky it is to use them and transfer to a better option. For now, most people just use whatever stablecoins are the top in the market.

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Quote from: Silberman on October 15, 2023, 05:27:36 PM

Quote from: Husires on October 14, 2023, 08:13:37 PM

Quote from: noorman0 on October 14, 2023, 03:34:29 AM

Because they are less monitored than the reserves themselves, so far I have not found a case of stablecoin freezing below $5k even though it was proven to be the proceeds of crime.

you can losing your entire balance, as happened with LUNA, or it may happen if the legal restrictions on these stable currencies are tightened, especially since we all know that they do not possess any reserves that would allow them to print more of these coins.
These are opposite things. If the stablecoin has a large market capacity, regulatory restrictions will increase on it, which may mean freezing even small deposits, and the stablecoin with a small market capacity does not have enough reserves to maintain the value of one dollar.

The risks of holding stable coins are only increasing by the day, now that governments want to release their CBDCs the first coins they will want to target will be stable coins, because if people have easy access to stable coins which they have used for years already then why use CBDCs? So I really think that governments are going to begin to make the life of stable coins holders very hard, and when I consider all of those factors it makes less and less sense to keep holding stable coins.

I can already imagine the negative articles and lawsuits aimed at USDT and USDC but Banks would probably focus on private businesses as their main target users so these issuers of other stable coins can still have time to enjoy their profits. It's like CBDCs are for B2B while those private-backed are for P2P.

Silberman

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Quote from: Husires on October 14, 2023, 08:13:37 PM

Quote from: noorman0 on October 14, 2023, 03:34:29 AM

Because they are less monitored than the reserves themselves, so far I have not found a case of stablecoin freezing below $5k even though it was proven to be the proceeds of crime.

you can losing your entire balance, as happened with LUNA, or it may happen if the legal restrictions on these stable currencies are tightened, especially since we all know that they do not possess any reserves that would allow them to print more of these coins.
These are opposite things. If the stablecoin has a large market capacity, regulatory restrictions will increase on it, which may mean freezing even small deposits, and the stablecoin with a small market capacity does not have enough reserves to maintain the value of one dollar.

The risks of holding stable coins are only increasing by the day, now that governments want to release their CBDCs the first coins they will want to target will be stable coins, because if people have easy access to stable coins which they have used for years already then why use CBDCs? So I really think that governments are going to begin to make the life of stable coins holders very hard, and when I consider all of those factors it makes less and less sense to keep holding stable coins.

Abiky

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Quote from: nelson4lov on October 12, 2023, 09:40:07 AM

Stablecoins play an important role in the DeFi industry and helps immensely with liquidity of decentralized finance industry. However, the quirk you mentioned is particular to just centralized version of stavle coins. I feel like they do this in order to stay complaint with regulations.

A decentralized stablecoin like DAI doesn't have these type of mechanisms built in for censoring addresses.

The best thing to do is to not do anything with centralized stablecoin that would trigger addition to the blacklist or just use a decentralized stablecoin like DAI. Most of the addresses in those blacklists are addresses that contain hack funds.

Decentralized stablecoins might be an option. But most of them fail due to their inability to maintain the USD peg for long. No USD reserves = high risk of a collapse in the long run. I believe this applies for decentralized algorithmic stablecoins. I'm yet to see whenever collaterized stablecoins that are decentralized (eg: DAI, USDJ) will be able to maintain their peg forever. Life is all about risks, anyways.

Despite the on-going centralized stablecoin censorship, I don't think they will be going anywhere soon. Especially when most crypto exchanges and companies are behind them. They're better than traditional Fiat currencies because they can be frozen/manipulated at will. Not only that, but they're highly-programmable, allowing anyone to use stablecoins on "De-Fi" apps and more. I guess that's their main selling point over CBDCs (especially the programmability part). If stablecoin issuers only censor illegal activities on-chain, then should be nothing to worry about. But when things go too far, it's going to be a huge problem for everyone. Who knows if stablecoins will live alongside traditional cryptocurrencies for generations? Grin

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I really don’t understand why someone would hold a stablecoin instead of cash. It’s like you get additional regulatory risk on top of the typical crypto risk while also eliminating the ease of spending that USD has and the big topper is that you won’t ever get any appreciation like with other crypto. It’s the worst of all worlds.

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Quote from: o48o on October 13, 2023, 04:43:31 PM

If you get your stablecoins frozen you have been using laundered or stolen money, you are a terrorist organization or a black listed person. They don't just freeze joe nobody's money.

And stablecoins are rising popularity is because it's easy to use them for trading in dexes. You can't do that with normal fiat money.
Sometimes it's just practical to convert into something less volatile like value of usd. Sure it's centralized but so is real fiat money. If you want to use money that's not going to be frozen, there still are decentralized currencies out there. But even those can be frozen in CEXes.

And who decides who is terrorist and who is not? Some states see the organizations as terrorists and others see same ones as heroes. The perspectives of people and countries may vary depending on their stand. Who can declare someone guilty without a fair trial?
This is one of the biggest problems of centralized systems. I trust stablecoins as much as I trust national currencies, maybe even less.

Xal0lex

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I've never encountered it, but I always try to protect myself from being subjected to blocking a substantial amount of my stablecoins. I always buy stablecoins on different services and use multiple addresses to do so. Never store centralized stablecoins on a single address, otherwise one questionable interaction with a service can result in the entire amount being blocked. Censorship and regulation in the crypto environment is constantly increasing, so you need to use risk diversification.

Husires

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Quote from: noorman0 on October 14, 2023, 03:34:29 AM

Because they are less monitored than the reserves themselves, so far I have not found a case of stablecoin freezing below $5k even though it was proven to be the proceeds of crime.

you can losing your entire balance, as happened with LUNA, or it may happen if the legal restrictions on these stable currencies are tightened, especially since we all know that they do not possess any reserves that would allow them to print more of these coins.
These are opposite things. If the stablecoin has a large market capacity, regulatory restrictions will increase on it, which may mean freezing even small deposits, and the stablecoin with a small market capacity does not have enough reserves to maintain the value of one dollar.

goaldigger

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They are not attacking normal account, and they are just protecting their own people from a possible fraud or money laundering, seriously most of those stablecoin censorship are from a suspicious account and the exchanges have the right to do their investigation about your money. Well, stablecoin are still better compare to the banks and those exchanges are just executing their rules and regulations, aside from that I didn’t see any problem as long as they are doing it in process.

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Quote from: noorman0 on October 14, 2023, 03:34:29 AM

Quote from: Abiky on October 12, 2023, 09:10:50 AM

-snip-
If these entities do the exact same thing banks do, why are stablecoins rising in popularity?

Because they are less monitored than the reserves themselves, so far I have not found a case of stablecoin freezing below $5k even though it was proven to be the proceeds of crime.

Whoever doesn't want to deal with annoying bureaucracy just for a small transaction value, stablecoin can solve that. Meanwhile, what we know is that fintech services like Paypal can suspend your money even for $5 and they mark your bank account too.

Of course stablecoins is much more convenient than transferring electronic cash through third party services like PayPal. The chance of freezing your funds is also very low. But you need to realise that stablecoins are a surrogate for the dollar and at one point it may all become illegal.

danherbias07

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There's a chance these are bad addresses. I am assuming. Grin

Think about it, they are a centralized business so they cannot just close down any count without proper reason on why they did it. It will mean their business will get a bad reputation if proven that they are holding down or freezing accounts without any good reason at all.
I don't disagree with stablecoins but I don't use the popular ones like USDT. If I have to pick a stablecoin I'd rather be in BUSD and I did a lot of transactions there when I was still playing DeFi games and NFT games so because I didn't have any problem using it I will just stick with them.
Anyway, it's centralized so we cannot expect much when it comes to protecting our privacy.

noorman0

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Quote from: Abiky on October 12, 2023, 09:10:50 AM

-snip-
If these entities do the exact same thing banks do, why are stablecoins rising in popularity?

Because they are less monitored than the reserves themselves, so far I have not found a case of stablecoin freezing below $5k even though it was proven to be the proceeds of crime.

Whoever doesn't want to deal with annoying bureaucracy just for a small transaction value, stablecoin can solve that. Meanwhile, what we know is that fintech services like Paypal can suspend your money even for $5 and they mark your bank account too.

Topic: Stablecoin censorship - page 2. (Read 420 times)