Topic: Warning <$100,000 worth of the stablecoin were frozen in the wallet> (Read 349 times)

Yes I understand it is used to act against illegal activities and so but the fact is that these stable coins are not decentralized.

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But it also puts power back in a centralized entity's hands. We're talking about a global usage here, what if you're in a country where your government has problems with U.S, even tough you're doing no illegal activities, you are at risk of losing your funds.
In fact FIAT should've just stayed FIAT and keep following its rules. having them in merged in crypto space was not a good idea, crypto space would be better off without them.

UP

Using stablecoin is only dangerous for criminals not every day crypto users, if you are into illegal activities or you are a scammer don't bother using stable coins or else you will lose your money, in fact I want criminals off crypto space, I like the fact that address are getting blacklisted or freeze, it's really really good

In the future we might see strict actions taken against these scammers rather than just confiscating their coins and i am hopeful that the cryptocurrency market can get rid of all the scammers if they are taking care of scams and mark the coins made through scamming others so that they will not have any valuation and hence getting rid of all the scammers from the market. The future is bright and we will see many developments on that regard.

This is why centralized tokens are not money. And this is why opaque ledger cryptocurencies matters. If Eteherum would not be transparent ledger cryptocurency then no one would know where this tokens are located and blacklisting wallets would be totally useless. Money have to be fungible to be perfect money!!!

The way CoinBase and co is going about things is going to hurt the company and the space. This just shows that people will need to think twice before touching their tokens and even using their exchange. I still feel that privacy coins are greatly undervalued in the space, with more microscope being on the space now their would be great demand for them

Stable coins that are centralized are better, honestly this is the best way to avoid embezzlement and some illegal money in crypto space, the best way to stop scam and hackers in crypto space is going centralized, decentralized is freedom for criminals

There are two things that I want to highlight here and those are decentralization or regulation.
Wallets getting frozen clearly means that the coin is completely centralized but it also helps the user to report any theft or scams since the wallet provider will be able to freeze the funds as in the above case.

If people want to stop theft and scam then they will have to go for centralized coins where a centralized entity will have the ability to access your funds but the same would also ensure that better regulation can be in place.

If people want decentralization then they will have to deal with the scams and theft because they will be the ones responsible for it.

Obviously they will not frozen the account without valid point. Since the user have been proven to be scammer then its their right as a legit platform to locked his account. Its not like they are doing this on their own and if they pick your account to lock. But this case will mark a big issue on the market that stablecoins are not safe to use with. They should release a public statement and explanation so they are not be crucified by the crypto community.

the owner of the wallet was a scammer and it has already verified by some people. I guess those who have been scammed by him already taken legal action and centre was only doing it caused by that.
It's good if the scammer can't take that amount.

I doubt this happens without the owner of the wallet flouting some rules or involved in an illegality. We know series of fraud are taking place with the use of cryptocurrency, the wallet owner might have been flagged up for involving in fraud.

Who knows what happened and if what really happened was enough reason to freeze such amount, this is where issues of centralization hits the bone, had it been the funds were in Decentralized coins it would have been better. I'm not standing with nor supporting wrongdoings but at least enough reasons should have been given as to why such happened. Also with this act many people will start being careful of stablecoins especially the centralized types as it has exposes the fact that by request from the government your asset can be locked.

You should understand why some centralized coins have implemented this ability caused by there were so many hacked cases and then this ability can help the victim of these hacked cases to get back their money. This is also to comply with the regulation. Just leave it if you didn't like it

I guess the reason for the freezing was because the terms and conditions was not complied with. Which brings us to the reason why it's good to go through terms and conditions of whatever we're signing up for.

In this though, the fund might be from a scam, Which made it to get frozen. There is a valid reason because this doesn't happen. Reports like this is rare.

Useful information, never considered the fact that the protocol owner could simply freeze and reclaim funds whenever they want.

Although this is a useful process when complying with law enforcement, it's definitely not something that the coin holders want to have looming over them.

I wonder how it would work at exchange platforms, since they usually use pooled wallets. Would the exchange take the hit? I don't imagine many have mechanisms in place to detect when an address has been frozen out, while some allow instant off-chain trades between crypto assets.

Seems like an imperfect solution.

In any case, DAI is looking a lot more appealing now.

The freeze option is the main reason we should stop using centralized stablecoins. Your funds are never safe, even when holding funds on a cold wallet. It is better to use DAI which is completely decentralized.

it's not just a matter of being victim of a scam. when you accept their TOS (Terms of Subscription) and start using their coin you're accepting their rules. Has anyone ever read it before blaming them? Stable coins are not crypto coins! You're assuming a double risk, first using "FIAT" cash (inflation!) secondly using a coin that implies some rules/obligations !

That's the reason I like DAI the most only sad thing is that not many exchanges have DAI listed.

I really think there might be some big reason for them to freeze that address we can't be sure unless the reason is revealed.

if its came from scammer address its deserve to be freeze and cannot use the balance of the wallet he have.

Just think about the victim of the scam, as long as it's a valid reasons I don't think its bad to block the address so scammers cannot use the balance they stole from people.


If you plan to use scam money stable coin is not for you find different coins that they can't block the address or balance in it use monero  or different private coins.

Every centralized coin can freeze the user funds no matter either it is stable or volatile, but decentralization has nothing to do with this activity the user has been blacklisted for violating some laws in that country so every stable coin user need to be aware of this.Your funds can be frozen for any reason even without your permission.

That's why they used to say stablecoins are not even cryptocurrency. If the token are able to freeze any balance, how can they be decentralized. And without decentralization, a cryptocurrency does not serve the purpose.
Without DAI, it seems all the coins can freeze balance. I see a good future of DAI.

The amount is not small it is a big amount that has been frozen. I am sure this address must have been used for some illegal activities or scams. Why will it be frozen by the centralized authority without any reason? Let it be investigated and within a few months we will know what exactly was happening with the sum of Money?

it looks like the amounts that have already blocked related to the illegal activities. circle has already stated if that was can't be unlocked. If that was fully decentralized and the authorities will asked the exchange site to block it. Authorities have a lot of ways to do that.

It's difficult to judge their action since no reason was provided at first. But, I doubt they will freeze a wallet without a valid reason. It might be for compliance, what if the funds from that wallet were stolen funds. As long as there is no suspicious activity, your funds will be safe. However, it is better to be safe than sorry. Just be cautious when using stable coins.

USDC is certainly not decentralized and they are a legit business under the US jurisdiction. They need to comply when the government asks.
It's the same for most of the exchanges and other coins and tokens. Even if it were decentralized coin, the authorities would make it hard for the person to cashout.

It doesn't matter what he did. Maybe he stole it maybe he did not. Was he sentenced? Was there a conviction?

They froze his money without a trial so this shows how dangerous using a stablecoin can be when somebody suspects you of something and you get your money stolen from you which can make you unable to hire a lawyer and defend in court. It can also make you unable to travel to whenever you want to defend your case and so on.

Yes, theres a reason why they frozen the USDC and blacklisted the user wallet address which I'm sure it something that have to do legal issues but I dont the reason why people still make use of centralized fiat backed stablecoins when there's already precious metal backed and decentralized stablecoin.

OP I'm so against hackers and crypto scammers, if that money have something to do with illegal activities then it's good move that the address got frozen, this is why I like centralized projects sometimes, criminals shouldn't be allow to roam free on blockchain space

But the main point here is about the centralized nature of USDC. Now the control is again back with the companies or the issuer of the token and moreover the chances of exit scam also will be increased with newly launched stable coins. This isn't the idea behind the use of cryptocurrencies as they were meant to be decentralized in nature, now what is the difference between the banks freezing the wallets and USDC which also did the same. Now maybe people shouldn't hold their coins in the form of stable coins which I previously used to do.

I agree with you. They don't freeze the owner wallet without heavy reason.Who know's that is a scammer and he stole that big amount of money from someone or maybe he is a wise hacker. We don't really know the exact reason behind it so,let's wait another news regarding this matter and don't jump into conclusion.

Same thought.

They wouldn't freeze an address without a valid reason, why would they blacklist that? No random agency would do that. Just like in Binance, whenever there's an address coming from a hacker or stolen funds, they'll blacklist the address so whenever a fund comes to their exchange from that address, they'll freeze it.

It's what I wanted mate, it's what many crypto investors want too I guess, enough of theft and using crypto to get away with crime, I'm sure that money isn't legal, there is more we ain't knowing yet, why do we hope for regulations if it's not to stop all this stealing I'm crypto space? I'm glad USDC make this move

$100,000 is a big money and I am sure this huge amount of money is related to some theft or illegal proceedings. So it's good to have such kind of controls in crypto market. This is the only way we can stop illegal things her. We often hear about million dollar hacks in bitcoin, but we need to realize that the uncontrollable nature of bitcoin is actually fueling such nuisances.

With USDC, there's actually a chance of getting the hacked money back to its lawful owners. That's great for this crypto market filled with thieves and miscreants! I don't see any danger here unless you are doing something illegal!

Don't judge on this yet, I suspect that address owner stole that money, it's better for centralized power to deal with criminals, if it's on decentralized projects the criminal will escape with that money, if this is what happened I'm glad the money is frozen

I think that was not the whole idea, there must be a specific reason why they block that address and freeze that $100K worth of USDC or maybe there was a compliance issue between the holder of that address and the US legal authorities, Since we are using a US dollar-backed stable coin we must set to comply all of the requirements while holding a US dollar-backed stable coins.

Warning using stablecoins is dangerous. The CENTRE Consortium blacklisted a USDC address in response to a law enforcement request, freezing $100,000 worth of the stablecoin.
What happens when an address is frozen/blacklisted: it cannot receive USDC anymore and all USDC controlled by that address is blocked and cannot be transferred on-chain.

CENTRE, which issues the dollar-pegged USDC on top of the Ethereum blockchain, confirmed the move, though Circle spokesperson Josh Hawkins, speaking on behalf of the joint Circle-Coinbase operation, said he could not provide any specifics about the blacklisting, which appears to have occurred in mid-June.


This incident confirms the limits of decentralization when it is sent or received by stablecoins especially USDC. where normally funds are under user control, in order to remain compliant CENTRE wields the power to sanction certain accounts.

According to the document, CENTRE will also consider a blacklist “to comply with a law, regulation or legal order from a duly recognized U.S. authorized authority, U.S. court of competent jurisdiction or other governmental authority with jurisdiction over CENTRE.”

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

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The above incident confirms USDC blacklisted address, but he is not the only one:


Tether (USDT) and USD COIN, TRUE USD, AND BUSD (Binance usd) can be frozen/reclaim and they can prevent me from sending and ask for my files they will be of no value.

All of these stablecoins can be blocked at addresses or prevented from sending and receiving money on them.