[UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets - page 3.

o_e_l_e_o

legendary

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Quote from: gentlemand on July 11, 2020, 03:56:41 AM

I think we'd hear about that very quickly and very loudly if they ever attempted that.

But 40 addresses containing a combined almost $10 million USDT have been blacklisted going as far back as 2017, and this is the first we're hearing about it. Given the Tether is a complete scam from top to bottom, I wouldn't put something like this past them.

Centralized exchanges freeze accounts and seize coins all the time with very little blowback from the community. No reason Tether can't do the same. I also wouldn't be in the least bit surprised if Tether started demanding KYC and proof of address ownership from various people in return for having their addresses un-blacklisted.

gentlemand

legendary

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Welt Am Draht

My guess for those moves are theft, technical reasons and general housekeeping.

Since they have an official burning process there's no need to blacklist anything to 'remove' them. That also increases paranoia about their activities, which they probably don't care about, but I doubt anyone would want to foster it.

o_e_l_e_o

legendary

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Quote from: big_daddy on July 10, 2020, 01:00:45 PM

and more USDT will be frozen https://cryptobriefing.com/tether-can-freeze-your-usdt-39-addresses-containing-millions-blacklisted/
just wait for it

Looks like another address containing another $1.5 million USDT was just banned yesterday. You can keep track using this dashboard: https://explore.duneanalytics.com/public/dashboards/3zhIaRUCFgmZMKqHG0pguvSvw1aOGL8gxFtZ2ujf

Call me cynical/crazy, but maybe this is how Tether get out of the fact that they have printed millions of USDT out of thin air which aren't backed up by USD, or indeed, by any asset whatsoever. Permanently blacklisting an address like this effectively burns the coins and removes them circulation. Nice easy way for them to renege on some of their commitments.

gentlemand

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Welt Am Draht

Quote from: figmentofmyass on July 10, 2020, 06:49:38 PM

i was surprised to find out recently that tether has actually blacklisted significantly more. there are dozens of blacklisted (frozen) addresses totalling ~8 million USDT. https://twitter.com/PhABCD/status/1281054838172848128

I presume most of that is straightforward theft more than anything, as quite possibly the USDC one is too. Some are theorising in that Twitter thread about there being something wrong with the addresses themselves but I know zilch about ETH and wouldn't think that was possible. Nowt would surprise me though.

figmentofmyass

legendary

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Quote from: gentlemand on July 08, 2020, 05:37:33 PM

Giving this a bump.

https://www.theblockcrypto.com/linked/70850/centre-appears-to-have-blacklisted-an-address-holding-usdc-for-the-first-time

100,000 USD (C) frozen.

I wonder what the story is behind this.

if you think about it, holding USDC is really no different than holding USD at coinbase. they are both just centrally issued IOUs from an exchange. freezing and confiscation were always a possibility, especially when you consider potential requests from law enforcement. i was always curious about the exact method of confiscation. i guess now we know.

Quote from: gentlemand on July 08, 2020, 05:37:33 PM

Ironically this is likely to fortify Tether's position.

i was surprised to find out recently that tether has actually blacklisted significantly more. there are dozens of blacklisted (frozen) addresses totalling ~8 million USDT. https://twitter.com/PhABCD/status/1281054838172848128

malevolent

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Quote from: 20kevin20 on July 08, 2020, 07:44:56 PM

Quote from: gentlemand on July 08, 2020, 05:37:33 PM

As ever these things are nothing more than Paypal with extra paranoia and desperation to yield to The Man. There'll be plenty more of this in future.

At least with PayPal you have reliable support, you are quite sure your $1 will still be worth $1 tomorrow and can solve any issue way faster. Have problems with a cryptocurrency? Good luck getting out of your own sh*t fast enough without having to be considered some sort of criminal by the authorities.

Only few days ago did I say over here that stablecoins may be good short-term "safezones" for Bitcoin parabolic changes. I'm now taking back my own words. Better have a 30% overnight paper loss than have 100% of your balance frozen and blacklisted.

PayPal and similar services masquerading as banks are not exactly a paragon of reliability. PayPal especially is infamous for freezing funds for 6 months for spurious reasons.

big_daddy

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xUSD - The PRIVATE stable coin - Haven Protocol

and more USDT will be frozen https://cryptobriefing.com/tether-can-freeze-your-usdt-39-addresses-containing-millions-blacklisted/
just wait for it

gentlemand

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Welt Am Draht

Quote from: ABCbits on July 09, 2020, 07:32:21 AM

Until someone did something that attract government attention and Tether will be pressured to do similar action.

I seem to recall Tether cancelling hacked balances but other than that it would be interesting to see how they handled such a thing.

The main difference between Tether and everything else is them effectively giving up the dollar redemption. You have to find a third party mug to do it.

All they're doing in the main is operating a standard ERC20 token. Not having to deal with banking for regular dweebs, other than their own druggy banking to initially fund it and the tiny inner circle who they presumably do allow to cash out, is going to massively reduce their twitchiness.

I'll guess the standard stablecoins regard themselves as extensions of the dollar with all the terror that entails. Tether are probably the opposite.

mk4

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Paldo.io 🤖

Quote from: gentlemand on July 09, 2020, 03:34:37 AM

It shouldn't be surprising and since it's their toy, being at their mercy should be expected.

The problem is at whose mercy you are. Circle's track record is not one of competence and none of these operations are accountable or approachable. They're also terrified of triggering their legacy masters and you're the one stuck in the middle who'll pay the price for that. You have the odds doubly or triply stacked against you.

At least with a normal bank you have a place to cover in cow shit in protest and identifiable people to blow up. With stuff like this you're nothing but an ignored email.

Shouldn't really be surprising indeed, but a lot of people shrugged this off because they haven't heard of such occurrence in the past. Well, here you go. I really wouldn't be surprised if at one point the wallet-locking occurrences will be no different with how much PayPal accounts are being locked.

ABCbits

legendary

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Crypto Swap Exchange

Quote from: gentlemand on July 08, 2020, 05:37:33 PM

Ironically this is likely to fortify Tether's position.

Until someone did something that attract government attention and Tether will be pressured to do similar action.

gentlemand

legendary

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Welt Am Draht

Quote from: mk4 on July 08, 2020, 11:26:39 PM

But yea, think. twice. when. holding. stablecoins.

It shouldn't be surprising and since it's their toy, being at their mercy should be expected.

The problem is at whose mercy you are. Circle's track record is not one of competence and none of these operations are accountable or approachable. They're also terrified of triggering their legacy masters and you're the one stuck in the middle who'll pay the price for that. You have the odds doubly or triply stacked against you.

At least with a normal bank you have a place to cover in cow shit in protest and identifiable people to blow up. With stuff like this you're nothing but an ignored email.

mk4

legendary

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Paldo.io 🤖

Bump! Here it is ladies and gentlemen, as far as I know this is the first. But yea, think. twice. when. holding. stablecoins.

Article: https://www.coindesk.com/circle-confirms-freezing-100k-in-usdc-at-law-enforcements-request

20kevin20

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Quote from: gentlemand on July 08, 2020, 05:37:33 PM

As ever these things are nothing more than Paypal with extra paranoia and desperation to yield to The Man. There'll be plenty more of this in future.

At least with PayPal you have reliable support, you are quite sure your $1 will still be worth $1 tomorrow and can solve any issue way faster. Have problems with a cryptocurrency? Good luck getting out of your own sh*t fast enough without having to be considered some sort of criminal by the authorities.

Only few days ago did I say over here that stablecoins may be good short-term "safezones" for Bitcoin parabolic changes. I'm now taking back my own words. Better have a 30% overnight paper loss than have 100% of your balance frozen and blacklisted.

hatshepsut93

legendary

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Quote from: gentlemand on July 08, 2020, 05:37:33 PM

Giving this a bump.

https://www.theblockcrypto.com/linked/70850/centre-appears-to-have-blacklisted-an-address-holding-usdc-for-the-first-time

100,000 USD (C) frozen.

I wonder what the story is behind this.

As ever these things are nothing more than Paypal with extra paranoia and desperation to yield to The Man. There'll be plenty more of this in future.

Ironically this is likely to fortify Tether's position.

I'd seriously rather use a bank than storing my fiat money in a stablecoin, a bank is less likely to go down, and in the event it does there's even some chance to get some of your money back. Banks can even get bailed out by central banks, but with stablecoins you get all the downsides of centralized custodians, plus some of the downsides of crypto, like managing your private keys, and then there's no of the benefits, like legal protection, deposits, cashback, etc.

gentlemand

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Welt Am Draht

Giving this a bump.

https://www.theblockcrypto.com/linked/70850/centre-appears-to-have-blacklisted-an-address-holding-usdc-for-the-first-time

100,000 USD (C) frozen.

I wonder what the story is behind this.

As ever these things are nothing more than Paypal with extra paranoia and desperation to yield to The Man. There'll be plenty more of this in future.

Ironically this is likely to fortify Tether's position.

mk4

legendary

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Paldo.io 🤖

Quote from: gentlemand on March 24, 2020, 05:56:32 AM

No way do I trust ETH, any programmer or any contract to be dependable enough to run something like that where it actually counts in the real world. It's all too amateurish still. Things like this should remain a research project until it's totally bulletproof and maybe it never will be.

I totally agree with this. I'm a bit interested in Ethereum, but there's no way I'd invest money in ETH. I'm just watching in the sidelines as of now and I really don't see that changing anytime soon. Seriously, if only the Ethereum people wasn't like immediately concluding that Ethereum is this super wonderful thing that's guaranteed to succeed in the future(and shitting on Bitcoin because apparently everything should be using a blockchain lul), Bitcoin maximalists wouldn't be shitting on it.

figmentofmyass

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Quote from: gentlemand on March 24, 2020, 05:56:32 AM

It's good for research purposes that it happened. Things will be learnt. Not good for the people who got boned by it.

it's certainly been a learning experience. i never realized how dangerous DAI was. the underlying CDPs are prone to margin flash crashes. at first i thought "oh well, that's the risk CDP holders took, at least it only affects them". but like any situation where liquidations can't be absorbed by the market, borrowers aren't the only ones who suffer. the flash crash screwed over DAI holders by leaving $4.5 million of unbacked DAI in the system.

and we all thought tether was the only stablecoin that wasn't fully backed. Tongue

gentlemand

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Quote from: mk4 on March 23, 2020, 10:57:11 PM

Yea it's really unfortunate. Though I was always heavily skeptical of MakerDAO due to it's huge potential to break down when black swan events occur(like what we had recently), I've always found it really really interesting. Unfortunately it's the only "stablecoin" we have right now that's unconfiscatable(correct me if I'm wrong).

I am completely unsurprised by what happened there. When it comes to things like this there is one rule - if the potential to screw up badly is in there somewhere it will happen and there will be someone at the right time and place to exploit it. And if random events don't make it happen then someone will force it to happen.

No way do I trust ETH, any programmer or any contract to be dependable enough to run something like that where it actually counts in the real world. It's all too amateurish still. Things like this should remain a research project until it's totally bulletproof and maybe it never will be.

It's good for research purposes that it happened. Things will be learnt. Not good for the people who got boned by it.

mk4

legendary

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Paldo.io 🤖

Quote from: libert19 on March 22, 2020, 11:17:10 PM

MakerDao was on verge of shutting down with ethereum's recent flat crash, these stable coins are not 'stable' as we think.

Further reading:

1) https://insights.glassnode.com/what-really-happened-to-makerdao/

2) https://www.coindesk.com/defi-leader-makerdao-weighs-emergency-shutdown-following-eth-price-drop

Yea it's really unfortunate. Though I was always heavily skeptical of MakerDAO due to it's huge potential to break down when black swan events occur(like what we had recently), I've always found it really really interesting. Unfortunately it's the only "stablecoin" we have right now that's unconfiscatable(correct me if I'm wrong).

squatter

legendary

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STOP SNITCHIN'

Quote from: BayAngelo on March 23, 2020, 11:25:30 AM

there are questions begging to be answered here. Are users required to perform KYC once or multiple time to claim their coins? what if the company is not satisfied with the KYC of the coin owner.

The situation with centralized stablecoins is much the same as centralized exchanges. In general, you would only need to perform KYC once. However, we're increasingly seeing instances where both exchanges and stablecoin issuers are freezing accounts and demanding additional due diligence about income and funding sources. If they don't like your answers, they close your account but usually return your money.

I believe this is because exchanges and stablecoin issuers are implementing the type of risk-based AML demanded by FATF rules. As time goes on, I expect cryptocurrency service providers to become increasingly careful about who they do business with, for fear of crossing banking and AML regulators.

Topic: [UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets - page 3. (Read 2463 times)