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USDT & USDC Freezing Accounts

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This is very bad. Thank you for the knowledge as I had no idea, I was thinking cryptocurrencies are decentralized and nobody is in control and I never thought that these cryptocurrencies had this ability to freeze coins. This surprised me and I will be more careful now that I am reading it.

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I don't use stable coins although I knew that some of them are created this way. In case someone wants a decentralized stable coin for holding it is DAI. Not a bad idea although it is mostly in DeFi and while I think there won't be big troubles with it you never know.

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USDT and USDC are stable coins under the control of Tether and Coinbase and they were created to act as digital banks. I don't know more about them and they can block transactions and are centralized so they are not a threat to Bitcoin.

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You know that is the problem that are mostly associated with stable coins like tether, the regulations are always coming, sometimes I feel as though they are not completely a cryptocurrency 

4 hours ago, bogdanoff said:

Good to know so I'm not going to keep any of these stable coins in a wallet, although I think this is done for some reasons that might mean there are illegal activities. No matter this it means these tokens are centralized so I'm not going to use them.

 

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I think every coin cna freeze it's account but countries do not have much control over it. Even BTC can freeze it's users account if they find some sort of violation in it.

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On 7/10/2020 at 12:54 PM, BTC Future said:

When we talk about Bitcoin's features we always promote the characteristics it has that make it an unconfiscatable currency where no third-party rules the network and no account can be frozen at the demand of a government. This is due to the nature of Bitcoin as a decentralized currency that provides complete control to the user and does not allow anyone to control the network. We talk in general about cryptocurrencies having the same features as Bitcoin and call this "Financial Freedom", as everyone in the world can transact with anyone else, without any restriction and a third party authorizing or blocking the transactions. 

 

Lately though, we've noticed quite a few occassions where this isn't real, or not exactly as we thought it was.

 

USDC is created by Circle and backed by Coinbase. It is a stable coin that right now holds more than $1 Billion in market cap. It is an ERC20 token that runs on the Ethereum Network, meaning it is a smart contract that has certain code to perform certain functions. One of these functions make a centralized entity (Circle) been able to block funds and accounts. 

USDC is run by Central Consortium, which is the overseeing body by both Circle and Coinbase. Central Consortium recently blacklisted an adress containing 100,000 USDC at the request of a law-enforcement agency. It was reported in the past (link) that USDC was able to freeze accounts and that it was a centralized entity but there wasn't a similar case published until now.

 

It is now reported that Tether is using similar control over the wallets containing USDT and is also able to freeze accounts. According to reports (link) there are already 39 cases of ethereum wallets that contain USDT being frozen by Tether. The total amount of these addresses contain $7,9 million in USDT. All these addresses are frozen and they cannot send/receive USDT probably at the request of government agencies and law enforcement. 

 

image.png.f83e7d63ca58a9b30f9c4640fca20030.png

This is the message blacklisted addresses get on Etherescan when trying to move BUSD. So there seems to be a similar feature to freeze funds on the ERC20 Binance USD token as well.

 

Tether along with Bitfinex have the same CEO Paolo Ardoino and belong to parent company IFinex. Both companies are facing trial on New York about a loss of $850 million of the exchange clients funds. Tether is also supposedly backing each USDT with an amount of USD or "other assets" on a 1:1 basis. This of course has never been proven as Tether did not allow any audit to proceed and never disclosed bank USD and other asset reserves.

Tether right now exceeds 10 billion USD in market cap and according to cryptocurrency indexes as coinmarketcap and coingecko it has the most trading volume compared to any other cryptocurrency.

 

The existence of stable currencies is a good thing, and it is essential in the financial markets to preserve financial assets. I don’t know if there is a capacity for certain countries to freeze anyone’s assets.

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I still believe that there must be reason for the freezing of the accounts of those users, but still yet I don't think there's that much freedom when ever one invest in stable coins

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I am not getting you fully but as far i know about these stable coins, no issue is concerned with these stable coins and i have found nothing ambiguous using Usdc or Usdt


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Stable currencies are really good that they can work on for those who do not want to lose in the financial markets. They maintain their price against other currencies, and for this it was called stable.

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