Stablecoins and Blacklists

[zasad@]

Hi, I'm interested in your opinion.
links to interesting articles

https://www.hib.ru/tether-blokiruet-usdt/
https://medium.com/human-rights-foundation-hrf/privacy-and-cryptocurrency-part-iv-stablecoins-for-human-rights-blacklists-and-traceability-6d74ee17c25d

Tether blocks USDT. Here is a real example of a loss of $ 301’000 due to USDT blocking.

Trader withdrew $ 300,900 USDT from Binance exchange to ETH address  0xB1fa690155821bF9191d609593B556048Aca517c
Trader transferred $ 300,901.099742 USDT to new ETH address 0x5441bfcDA141759eaaE9737a28Cb2F9fd43e8869

https://etherscan.io/address/0xb1fa690155821bf9191d609593b556048aca517c#tokentxns


From the ETH address 0x5441bfcDA141759eaaE9737a28Cb2F9fd43e8869 the trader transferred $ 200,600 USDT to the address 0x087A39eCD3E12db24b76025efAF077a2fd6E44C2
https://etherscan.io/address/0x087a39ecd3e12db24b76025efaf077a2fd6e44c2#tokentxns

$ 100 546.1 USDT Blocked at Address 0x5441bfcda141759eaae9737a28cb2f9fd43e8869
https://etherscan.io/address/0x5441bfcda141759eaae9737a28cb2f9fd43e8869



$ 201 058,07 USDT Blocked at Address 0x087A39eCD3E12db24b76025efAF077a2fd6E44C2
https://etherscan.io/address/0x087a39ecd3e12db24b76025efaf077a2fd6e44c2



How to check the USDT Block?

1.Follow the link
https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c13d831ec7?a=0x087a39ecd3e12db24b76025efaf077a2fd6e44c2#readContract

2. In the field No. 18(isBlackListed) enter the address and press Query

We look at the result, true - the address in the blacklist, fals- clean. If the address is in the black list, then the USDT on it is frozen and it is no longer possible to send them anywhere.



Tether ( https://tether.to/ ) may block your USDT  at any time.

Wow, right?
And no one will explain to you the reasons for blocking

But this is only the beginning, I began to study this issue in more detail and found a lot of useful information.



Resource: https://medium.com/human-rights-foundation-hrf/privacy-and-cryptocurrency-part-iv-stablecoins-for-human-rights-blacklists-and-traceability-6d74ee17c25d

Almost all stablecoins can be blocked.
At the moment, only DAI does not have a blocking function and USDT-Liquid (but did not find who uses it).


KYT «Know Your Transaction»,
https://www.prnewswire.com/news-releases/chainalysis-provides-anti-money-laundering-compliance-solution-for-tether-301003370.html

This article is not limited to stable coins. Any ETH smartcontract may include a token blocking function and any funds may be blocked.

Knowledge is the best weapon!

USDC banned
https://www.theblock.co/data/decentralized-finance/stablecoins/usdc-banned-addresses-on-ethereum

[zasad@]

Capitalization of USDT - $8,924,973,068
https://wallet.tether.to/transparency

If you carefully examine their site, you will not find information about the audit of this company.

You can read only this phrase: "All tethers are backed 100% by Tether's reserves."  
https://wallet.tether.to/

The number of tokens for the past year and a half has doubled.



How do decent companies work?

Capitalization of  USD Coin (USDC)- $ 703 411 562
https://www.circle.com/

An audit is conducted every month by a well-known global company - Grant Thornton LLP
https://fr.wikipedia.org/wiki/Grant_Thornton_LLP
https://www.circle.com/blog

https://www.circle.com/blog/usdc-reserve-attestation-report-from-grant-thornton-llp-march-2020
https://www.circle.com/blog/usdc-reserve-attestation-report-from-grant-thornton-llp-feb-2020
https://www.circle.com/blog/usdc-reserve-attestation-report-from-grant-thornton-llp-january-2020


https://www.centre.io/usdc-transparency


Capitalization TUSD(TrueUSD)- $ 136 911 758
https://www.trusttoken.com

An audit is conducted every month by a well-known global company - armanino LLP

https://www.armaninollp.com/

Real-time report
https://real-time-attest.trustexplorer.io/token/TrueUSD


The most honest and secure stablecoin
https://coinmarketcap.com/currencies/single-collateral-dai/

Real-time statistics
https://makerburn.com/#/

[benthach]

Capitalization of USDT - $8,924,973,068
https://wallet.tether.to/transparency

https://wallet.tether.to/transparency

If you carefully examine their site, you will not find information about the audit of this company.

You can read only this phrase: "All tethers are backed 100% by Tether's reserves."  
https://wallet.tether.to/

The number of tokens for the past year and a half has doubled.

it just came out of thin air.
free money.
free money is good it can pump bitcoin higher 👍💪🐠🐡🐟🐙🥓🌮🌍

[Ucy]

Interesting.
Who is doing the blocking (if they were really blocked)? Did the owner/owners commit any crime? And was the crime clearly stated for the public to see? Are the stablecoins with such block feature decentralized or centralized? If decentralized, is the blocking done via network consensus?  No true decentralized stablecoin/crypto should be blockable without proper, transparent and community consensus. So, I would avoid any so called decentralized stablecoin that can be blocked without proper consensus.  Decentralized coins should be censorship resistant and transparent. The only coins that could be frozen/blocked are those that have been used for serious crimes or owned by serious proven criminals.

[Febo]

Interesting.
Who is doing the blocking (if they were really blocked)? Did the owner/owners commit any crime? And was the crime clearly stated for the public to see? Are the stablecoins with such block feature decentralized or centralized? If decentralized, is the blocking done via network consensus?  No true decentralized stablecoin/crypto should be blockable without proper, transparent and community consensus. So, I would avoid any so called decentralized stablecoin that can be blocked without proper consensus.  Decentralized coins should be censorship resistant and transparent. The only coins that could be frozen/blocked are those that have been used for serious crimes or owned by serious proven criminals.

Stable coins are always centralised. Blocking is done by by owner/developer. This also beside it is centralised also makes stable coins not permisionless. Since you need permission from owner/developler if you can or not use it

Stable coins are not cryptocurrencies!!!!

[zasad@]

Update links for statistics

USDC - Number of Banned Addresses: 1 Banned Addresses
https://duneanalytics.com/phabc/usdc-banned-addresses

USDT - Number of Banned Addresses: 390 Banned Addresses
https://duneanalytics.com/phabc/usdt---banned-addresses

The reasons why the funds were banned are not reported.
Make the right conclusions in which stablecoins to stake your funds.

[zasad@]

https://decrypt.co/70732/tether-reveals-reserves-breakdown-for-the-first-time-since-2014

Tether Reveals Reserves Breakdown For The First Time Since 2014
The stablecoin issuer has revealed that nearly 76% of its reserves were held in cash and cash equivalents as of March 2021.
Scott Chipolina(c)
May 13, 2021

Stablecoin issuer Tether (USDT) has revealed a breakdown of its reserves for the first time since 2014, according to The Block.
https://www.theblockcrypto.com/post/104780/tether-usdt-reserves-breakdown-first-time-since-launch

[Nalbo]

This have been discussed about a lot in the forum. It's their coin with their rules, if you are not okay with it, you shouldn't use.
While the instances of user wallet being blocked with tokens in their is a rare occurrence, even in USDT, they are done for the interest of law enforcement agencies. Specially the US law enforcement. They need to do that for them to be doing business in US. Tether have released statement claiming those frozen accounts are of hackers or money launderers.

[menoiazei]

Or you can use XHV and xUSD instead

[FloridaKid]

Honestly I don't keep criminals around so I've never heard about usdt freeze alarm from any of my friends or families so I'm 100% sure that those freezed funds are from illegal activities or scam shits, if you don't like the whole idea just move on to DAI stable coin

[Ucy]

We look at the result, true - the address in the blacklist, fals- clean. If the address is in the black list, then the USDT on it is frozen and it is no longer possible to send them anywhere.



Tether ( https://tether.to/ ) may block your USDT  at any time.

Wow, right?
And no one will explain to you the reasons for blocking

Well, tether is likely not a decentralized cryptocurrency otherwise censorship wouldn't be possible without community or public participation.

A truely decentralized cryptocurrency may only allow censorship if a transaction has been publicly proven to dangerous/immoral. It has to be done publicly rather than in secret, and the reason for the censorship clearly stated and visible to the public. Besides, there has to be list of rules that guide this to prevent abuse.

I'm not sure we have truely decentralized cryptocurrency that censors transactions the right way yet, otherwise  no one will complain too much because it will be fair system.

[Karartma1]

snip

Interesting topic.
Now, this is for tether, ok? Imagine when those very power will be used on future CBDCs.
Do you get the picture?
If CDBCs will take over the old money world our wealth will be wiped out with the click of a button.
Are we ready for that? I mean, are we ready to keep our financial freedom as hard as we can?
We got fooled by the very system we were trying to fight:  we started looking for easy profits guided by greed and we completely lost track of the big picture.
Bitcoin was here to liberate us and now it could be turned into our worst nightmare.
Makes sense?

[Yudhisthir]

It's not just tether, Exchanges (centralized) and gambling sites are doing this for years. There are going to be a clear distinct branches of cryptocurrency, one being centrally controlled and another being decentralized, Decentralized coins and exchanges would be marginalized by the government so much that it would be hard to cash in and out from them in the near future. But the value would still be determined by the market.

[zasad@]

This have been discussed about a lot in the forum. It's their coin with their rules, if you are not okay with it, you shouldn't use.
While the instances of user wallet being blocked with tokens in their is a rare occurrence, even in USDT, they are done for the interest of law enforcement agencies. Specially the US law enforcement. They need to do that for them to be doing business in US. Tether have released statement claiming those frozen accounts are of hackers or money launderers.

Do we have to take their word for it?
Then where are these hackers or money launderers?
Where are the links to criminal cases?
If you have more detailed information, please share it.
I receive information about blocking accounts from third-party services and cannot find links on the official website.

[zasad@]

https://muellerberndt.medium.com/is-tether-a-black-swan-51095720b01c
Is Tether a Black Swan?

"In this article I attempt to address the following questions:
How would a loss of confidence in Tether play out in the short term?
Who would get most rekt if a Tether-related crash happens?
Would a Tether confidence crisis be a black swan event* that would severely impact the market?"

[tygeade]

Excellent thread and all this puts the focus back on why decentralized stable coins are much better than centralized coins. I guess people feel that because they are not involved in any wrongdoing so their coins should not be blocked but then like you mentioned, if coins are blocked you can't do anything honestly and the reason isn't given either.

I personally feel this is a selective scam, just like some crypto casinos are operating. They will let small players play but every once in a while they will scam a whale and there is literally nothing you can do because there's no proof or if even there's proof, how would you make your claim? Not every casino cares or solves accusations made at this forum.

[zasad@]

https://decrypt.co/76424/circle-unveils-backing-behind-dollar-pegged-cryptocurrency
Circle Reveals Backing Behind Its Dollar-Pegged Cryptocurrency USDC
Today, Circle, the company behind the stablecoin USDC, revealed the reserves that back the dollar-pegged token.

"According to a report written by Circle’s accountants Grant Thornton, which was issued on Friday, Circle held $22,176,182,251 in its account at the time of the report. Grant Thornton accountants verified that the figure equated to exactly one dollar for every USD Coin in circulation.

More than 60% of that number, or $13.4 billion, is held in cash. A quarter of the total reserves are split between Yankee Certificate of Deposits—a type of savings vehicle denominated in dollars—which account for $2.9 billion, and U.S. Treasury securities, which account for $2.7 billion. The remaining 14% is split between commercial paper and corporate bonds.
"
https://www.centre.io/hubfs/pdfs/attestation/Grant-Thorton_circle_usdc_reserves_07162021.pdf

[zasad@]

https://decrypt.co/76875/tether-execs-facing-department-justice-probe-alleged-bank-fraud
Tether Execs Facing Department of Justice Probe For Alleged Bank Fraud

"Tether executives are facing a U.S. Department of Justice probe on potential bank fraud committed during Tether's early days.

The U.S. Department of Justice (DOJ) is investigating whether or not Tether's executives have committed bank fraud, per Bloomberg.

Federal prosecutors are focusing on Tether's early days, where it is alleged that Tether potentially concealed from banks transactions that were linked to crypto."

[zasad@]

https://tether.to/latest-assurance-opinion-confirms-tether-fully-backed/
Latest Assurance Opinion Once Again Confirms Tether’s Reserves Fully Backed; Tether Continues to Lead The Industry on Transparency.

Paolo Ardoino, Chief Technology Officer at Tether, said:

“As an industry leader, we understand the importance of transparency and accountability. Our most recent assurance opinion from Moore Cayman again confirms Tether is fully backed.  A healthy and conservative portfolio with an emphasis on liquidity continues to fuel our growth and confidence in our innovative offerings.”

https://twitter.com/Tether_to/status/1424703057926008834

https://tether.to/wp-content/uploads/2021/08/tether_assuranceconsolidated_reserves_report_2021-06-30.pdf
______________

https://decrypt.co/78407/can-circle-win-stablecoin-wars
"Can Circle Win the Stablecoin Wars?
Circle wants USDC to be king of the stablecoins, but a lot of things will have to go right for that to happen.


In brief
Circle wants USDC to challenge Tether as the dominant stablecoin.
There are questions over USDC's reserves.
Circle is facing tough legal and business challenges."

__________________
The competition in the stablecoin market is huge.

https://decrypt.co/79257/paxos-stablecoin-pax-dollar

Paxos Rebrands Token as 'Pax Dollar' Amid Stablecoin Wars
"Paxos gives its token a new name, Pax Dollar, as the company tries to challenge larger stablecoin rivals.

In brief
The company's "Paxos Standard" coin will now be known as "Pax Dollar."
The move comes as Paxos tries to challenge stablecoin giants like Tether and Circle."

[zasad@]

https://www.cftc.gov/PressRoom/PressReleases/8450-21
"CFTC Orders Tether and Bitfinex to Pay Fines Totaling $42.5 Million
Tether to Pay $41 million Over Claims that Tether Stablecoin was Fully Backed by US Dollars
Bitfitnex to Pay $1.5 Million for Illegal Transactions While Operating Bitfinex Cryptocurrency Trading Platform and Violation of Prior CFTC Order"