There's a lot more risks with stablecoins, and they all stem from their centralization.
The company can be closed by the government if they feel like it doesn't fully comply with regulations, or if they think it threatens their control over the economy.
The company that manages the stablecoin can execute an exit scam or just fail for countless reasons, and the holders will end up with worthless tokens.
The underlying fiat currency can fall in value.
The company can stop their operations in certain countries and freeze the coins of individuals from those countries.
The company can get hacked and attackers may steal coins, customer data or cause other damage.
Topic: [UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets - page 5. (Read 2463 times)
November 24, 2019, 07:52:06 AM
November 24, 2019, 07:30:15 AM
So far, I've always thought that stablecoins are always anonymous and their owners have full control over them, this is one of my misguided knowledge.
I usually hide my assets in USDT when the market is in a slump, although everything is fine up to now but maybe I should pay more attention to stablecoin holdings.
I usually hide my assets in USDT when the market is in a slump, although everything is fine up to now but maybe I should pay more attention to stablecoin holdings.
November 24, 2019, 07:08:33 AM
This will convince the traders to stop holding USDT or other stable coins which has high volume at the moment?
I always suggested to use stable coins to cashout profits from trading and convert them back into decentralized coins sooner after the trend changes on prices but its definitely not a coin to hold on wallets.
Ehh, I really don't think it will convince traders in general. It's going to take so much effort to get these kinds of information out there even though it's completely necessary for everyone to know this.I always suggested to use stable coins to cashout profits from trading and convert them back into decentralized coins sooner after the trend changes on prices but its definitely not a coin to hold on wallets.
As for day trading, I have no problems with it. You're most likely going to completely be fine as long as you don't hold it for too long. I hold stablecoins for a week in maximum most of the time.
unfortunately since nothing horrible has happened yet, people tend to have a false sense of security about stable coins and end up using them in the wrong way such as storing!
Ah yes. The typical "it hasn't been hacked" reasoning. The same exact thing people said in the past with MtGox and with Bitfinex. 
November 24, 2019, 04:13:25 AM
I didn't know about the freezing options so thank you for creating this thread.
when something is centralized, you must assume that it already has that option or an option similar to that. in short "being centralized" means a third party having full control of the system and you are a simple user of that system they control. and that doesn't stop at stable coins, it will be true about any centralized coin (eg. XRP) or service (eg. centralized exchanges).
unfortunately since nothing horrible has happened yet, people tend to have a false sense of security about stable coins and end up using them in the wrong way such as storing!
November 24, 2019, 03:34:21 AM
I didn't know about the freezing options so thank you for creating this thread. Although I don't usually hold my assets in stablecoins it is good to know.
So for those who need stablecoins it's better to invest in DAI or Tether only on the Liquid platform.
The value of DAI varies. It's normal. I remember reading about DAI a long time ago. When the value of DAI is above $1 there is an incentive to create more DAI, sell it and make a profit. This will then lower the price to the $1 region. When the price is below $1 they do the contrary, they buy more DAI which increases the price.
So for those who need stablecoins it's better to invest in DAI or Tether only on the Liquid platform.
The value of DAI varies. It's normal. I remember reading about DAI a long time ago. When the value of DAI is above $1 there is an incentive to create more DAI, sell it and make a profit. This will then lower the price to the $1 region. When the price is below $1 they do the contrary, they buy more DAI which increases the price.
November 24, 2019, 03:18:23 AM
I didn't know that stable coin could be froze by the team itself, thanks for the great information.
This will convince the traders to stop holding USDT or other stable coins which has high volume at the moment?
I always suggested to use stable coins to cashout profits from trading and convert them back into decentralized coins sooner after the trend changes on prices but its definitely not a coin to hold on wallets.
This will convince the traders to stop holding USDT or other stable coins which has high volume at the moment?
I always suggested to use stable coins to cashout profits from trading and convert them back into decentralized coins sooner after the trend changes on prices but its definitely not a coin to hold on wallets.
November 24, 2019, 02:27:48 AM
The possibility of your assets getting frozen is quite unsettling for holders of any currency and shows how centralized such coins really are.
Definitely really really unsettling, and knowing the marketcap of Tether(USDT) alone, which is currently at 4.1 billion USD, I'm afraid majority of people don't know the fact that the funds can be freezed, heck, I don't even think that most people know the shadiness of Tether!
November 24, 2019, 02:20:51 AM
The possibility of your assets getting frozen is quite unsettling for holders of any currency and shows how centralized such coins really are. They primarily function as fiat currencies which are run in the blockchain and adhere strictly to all regulatory laws.
An article I found also claimed that some addresses have actually been frozen holding assets of about $41 million
The blog also said that while blacklist functionality exists for most stablecoins, “we can only find it having been used on USDT for 16 different addresses.” The study noted 7 frozen addresses for USDT–Bitcoin which accounted for $39,404,629 and 8 of the frozen addresses for USDT-Ethereum worth $1,959,156.10.
The exact reason as to why these funds were frozen was unclear
And the exact reason for the freeze was not made public. In my opinion the demerits of stable coins outweigh the merits.
An article I found also claimed that some addresses have actually been frozen holding assets of about $41 million
The blog also said that while blacklist functionality exists for most stablecoins, “we can only find it having been used on USDT for 16 different addresses.” The study noted 7 frozen addresses for USDT–Bitcoin which accounted for $39,404,629 and 8 of the frozen addresses for USDT-Ethereum worth $1,959,156.10.
The exact reason as to why these funds were frozen was unclear
November 24, 2019, 01:50:31 AM
Posted on the Beginners & Help section instead of the Trading Discussion section as for this to hopefully be seen by some people who hold stablecoins for longer amounts of time.
EDIT: Alright. Unexpectedly ended up being quite a slightly long write-up. When I first started writing this I thought it was only going to be a few sentences long. Trust me though, this is quite important information.
EDIT #2 (July 9, 2020): Let's just say, I told you so?
Article: https://www.coindesk.com/circle-confirms-freezing-100k-in-usdc-at-law-enforcements-request
I've been wanting to do a quick post here on Bitcointalk a month ago about this, but I lack information on other stablecoins besides Tether(USDT) so I delayed and delayed and delayed the posting further. Thankfully, and coincidentally, someone made a good Medium post about this just days ago, with the chart below.
This might be common knowledge for some, but I'm going to assume that a good number of people still doesn't know this yet. But most stablecoins can be freezed. Yes, even on your wallets. People might think that just because they're holding a certain cryptocurrency stablecoin on their non-custodial wallet, that they're already unseizable.
Well, that's unfortunately really not the case.
Here's a quote from the article:
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.
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