this is really an Eye opener and i learnt this today. we can collectively say that it is not save to Hold stablecoins because your KYC might be required to claim it back. it is also another way of saying that the stablecoin tokens are centralized.
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.
Topic: [UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets - page 4. (Read 2463 times)
March 23, 2020, 11:25:30 AM
March 23, 2020, 03:11:54 AM
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
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
It's not surprising since MakerDao trying to be decentralized with help of DAO, which known to have some critical bug in past. But it's not really related to the topic since DAI can't be frozen (unless whole ETH network is stopped/taken over).
bad code, congested network, and unresponsive oracles made the issue worse, but the real problem is DAI's entire model of leveraged ETH-collateralized debt. DAI CDP holders face the same risks that ETH margin traders/lenders do---a flash crash without sufficient bid liquidity = mass defaults. if ETH crashes hard enough, DAI holders are fucked. to save them, MakerDao would have to remove the peg or print MKR tokens and auction them for DAI to cover the shortfall.
it's either not a stablecoin, or it's not decentralized, take your pick. maybe DAI can't be frozen like USDT but it's got its own set of serious problems!
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
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
March 22, 2020, 10:54:30 PM
Going to bump this. While bitcoin is volatile(as per usual), take note of the risks you're taking when you're holding stablecoins(and NOT real USD).
November 30, 2019, 10:07:44 AM
The most notable refusals for redemptions have been Gemini and Paxos and in both cases it seems it was at least partly to - “maximize their status on CoinMarketCap.”
https://www.coindesk.com/winklevoss-crypto-gemini-gusd-stablecoin-redemption
https://www.ccn.com/paxos-standard-hassling-ethereum-traders-trying-to-redeem-stablecoin-pax-for-dollars/
Would you want your wealth tied up in something worried about how it looks on some piece of shit website?
When you consider how anal they are about conventional banking the anality will go up by an order of magnitude when it's their 'own' money.
https://www.coindesk.com/winklevoss-crypto-gemini-gusd-stablecoin-redemption
https://www.ccn.com/paxos-standard-hassling-ethereum-traders-trying-to-redeem-stablecoin-pax-for-dollars/
Would you want your wealth tied up in something worried about how it looks on some piece of shit website?
When you consider how anal they are about conventional banking the anality will go up by an order of magnitude when it's their 'own' money.
Thanks. I knew they were shady, but I didn't know they were THAT bad. Added your message to the main post for more visibility.
November 29, 2019, 02:37:41 PM
The most notable refusals for redemptions have been Gemini and Paxos and in both cases it seems it was at least partly to - “maximize their status on CoinMarketCap.”
That's even worse than I thought, it doesn't show them in a good light and proves they're no better than their competitor Tether with its untrustworthiness. OP should include the info.
November 29, 2019, 12:41:46 PM
The most notable refusals for redemptions have been Gemini and Paxos and in both cases it seems it was at least partly to - “maximize their status on CoinMarketCap.”
https://www.coindesk.com/winklevoss-crypto-gemini-gusd-stablecoin-redemption
https://www.ccn.com/paxos-standard-hassling-ethereum-traders-trying-to-redeem-stablecoin-pax-for-dollars/
Would you want your wealth tied up in something worried about how it looks on some piece of shit website?
When you consider how anal they are about conventional banking the anality will go up by an order of magnitude when it's their 'own' money.
https://www.coindesk.com/winklevoss-crypto-gemini-gusd-stablecoin-redemption
https://www.ccn.com/paxos-standard-hassling-ethereum-traders-trying-to-redeem-stablecoin-pax-for-dollars/
Would you want your wealth tied up in something worried about how it looks on some piece of shit website?
When you consider how anal they are about conventional banking the anality will go up by an order of magnitude when it's their 'own' money.
November 25, 2019, 06:01:45 AM
^ I've done the same for the Italian Local Board https://bitcointalksearch.org/topic/possiedi-qualche-stablecoin-usdt-tusd-ecc-ripensaci-5204358
Thank You for sharing this very important information
Best regards
Thank You for sharing this very important information
Best regards
November 25, 2019, 04:36:39 AM
The information in this thread should be shared to spread awareness so I took the opportunity and translated your thread into Croatian for the local community to know.
The link to the translation is here > https://bitcointalksearch.org/topic/da-li-trenutno-posjedujete-stablecoin-e-usdt-tusd-itd-razmislite-jo-jednom-5204334
Thanks again.
The link to the translation is here > https://bitcointalksearch.org/topic/da-li-trenutno-posjedujete-stablecoin-e-usdt-tusd-itd-razmislite-jo-jednom-5204334
Thanks again.
November 24, 2019, 09:14:21 PM
one of the problems with these other stable coins is their lack of liquidity and sometimes adoption by exchanges. since one of the usages of the stable coins is for moving funds between exchanges, using Tether is the only option in most cases since the other exchange may not even have anything else. so eventually everyone sticks with the shady option.
True. The next stablecoin with the highest liquidity next to USDT($6.1b volume) is USDC($30m volume). While USDC's volume is far less than USDT's, it's really not THAT bad. As long as you're trading with USDC:bitcoin and not some altcoin(probably besides ETH), you will probably be fine unless you do a huge transaction.I think only those funds are freezed which are suspected that they are involved in hack or illegal activity. Not sure, but your article hits the brain hard.
Well, that might just be what they claim. I'm not going to conclude that all these centralized companies that control these centralized stablecoins are evil, but even if they're not, they will have no choice but to obey if the government asks them to do things like freeze funds for whatever reason. 
November 24, 2019, 05:01:09 PM
I always been sceptical about stablecoins and I never hold any of these. There is quite many reasons like liquidity, centralization and etc why I don't like it, but I didn't knew that funds can be frozen. So, thank you for posting this stuff. But maybe this thing doesn't looks like something unexpected, because it's centralized cryptocurrency and I don't have any trust in it.
But seeing how big Tether marketcap is, it's worrying thing. Imagine them colapsing one day...
But seeing how big Tether marketcap is, it's worrying thing. Imagine them colapsing one day...
November 24, 2019, 04:19:18 PM
-snip-
Don't forget the biggest risk of all, which is that of insufficient collateral. We know for a fact that Tether isn't backed up anywhere close to 1-to-1 as they claim, and the fraction of it that is backed up is backed up with a variety of non-cash assets, including assets which don't even exist yet such as interest payments on a loan they made to themselves. Totally not shady. 
By freezing means the government will force these centralize entity to edit the smart contracts of these stablecoins?
It usually means that somewhere within the smart contract or code for these stablecoins there already exists a mechanism which allows the centralized entity controlling it to freeze coins or addresses at will. November 24, 2019, 03:41:04 PM
By freezing means the government will force these centralize entity to edit the smart contracts of these stablecoins?
I wonder what could be done to unfreeze too. Because if it happens that you just converted all your BTC to stablecoin since the prices started to crumble but only to see yourself without funds anymore because the thousands you got are immovable.
November 24, 2019, 03:22:41 PM
I was thinking before that stablecoins can somehow become a safe haven when a bloodbath happens in the market and it can be a good alternative then just converting your coins directly to fiat. But given that they have an "asset freeze" capability and on this scenario where such a bloodbath happens then it is much more scarier to hold stablecoins when they can freeze your crypto at any given time. What if you are trying to cash out your USDT because it is now being affected by the market or it suddenly going down then Tether suddenly decides to freeze everyone's wallet then you are basically screwed.
November 24, 2019, 03:13:45 PM
Stablecoins are a slightly better option than holding fiat on an exchange (assuming one stores them on a hardware wallet), since no one can socially engineer an exchange to perform an account takeover, but it still requires the holder to trust the entities behind them not to go down, not to freeze the stablecoins for spurious reasons, and that it will be possible to exchange them back into BTC or fiat without new requirements (stringent or more onerous KYC, etc.) being introduced in the future.
The fact that they can be stored on a hardware wallet may lull some newbies into a false sense of security, so watch out.
The fact that they can be stored on a hardware wallet may lull some newbies into a false sense of security, so watch out.
November 24, 2019, 01:08:31 PM
I think only those funds are freezed which are suspected that they are involved in hack or illegal activity. Not sure, but your article hits the brain hard.
Stable coins are the safe one during sudden bear or bull market now need to think on
Stable coins are the safe one during sudden bear or bull market now need to think on
November 24, 2019, 11:20:47 AM
Personally in the short short term, I'd go with centralized stablecoins like TUSD(because Tether is just too shady).
one of the problems with these other stable coins is their lack of liquidity and sometimes adoption by exchanges. since one of the usages of the stable coins is for moving funds between exchanges, using Tether is the only option in most cases since the other exchange may not even have anything else. so eventually everyone sticks with the shady option.
November 24, 2019, 10:59:43 AM
Lools like DAI is a better choice in terms of stablecoins.
Well, yea. It's really debatable. It's pretty much the risks of funds being frozen(centralized stablecoins) versus the price instability and the no guarantee of 1:1 peg(DAI/SAI). It mostly depends on what risk you're willing to take. Personally in the short short term, I'd go with centralized stablecoins like TUSD(because Tether is just too shady). But long term, I'd hold fiat and not neither. I'm still just not 100% convinced with DAI/SAI.
November 24, 2019, 10:49:57 AM
Thanks for your post I didn't know until now that those stablecoins has the ability to froze our funds except DAI. It really feels uncomfortable and unsafe holding these stablecoins if it's really true. I will be reading the medium post and look for its basis or source. But I guess it is still safe if you are using it on exchanges for trading. Lools like DAI is a better choice in terms of stablecoins.
A coin is stable because it is controlled by some authority. You might have heard the tether fud few month back and it was not fully backed by USD. You can trade with these stable coins but never keep your funds in them for long time. If you cannot keep your funds in Bitcoin and want to keep them in USD, go for the fiat which is more reliable than these coins.
November 24, 2019, 09:16:38 AM
Thanks for your post I didn't know until now that those stablecoins has the ability to froze our funds except DAI. It really feels uncomfortable and unsafe holding these stablecoins if it's really true. I will be reading the medium post and look for its basis or source. But I guess it is still safe if you are using it on exchanges for trading. Lools like DAI is a better choice in terms of stablecoins.
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