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Cryptocurrency News

USDC funds frozen at law enforcement request

Law Enforcement Request

The CENTRE Consortium, which is responsible for issuing the dollar-pegged stablecoin USDC, has blacklisted an address with $100,000 in it at the request of law enforcement. A company’s spokesperson stated: “Centre can confirm it blacklisted an address in response to a request from law enforcement. While we cannot comment on the specifics of law enforcement requests, Centre complies with binding court orders that have appropriate jurisdiction over the organization.

Blacklisted Funds

The address which has been blacklisted is this one here.

USDC lives on the Ethereum blockchain and is an ERC-20 token. An addition that was made is to add the ability to blacklist an address for legal compliance purposes as stated on Circle’s website. There is a “Global Blacklist”, with this one being the first recorded event, and any USDC balances in address on that list “may be wholly and permanently unrecoverable”.

Centralisation

Legal compliance is certainly important, however the mechanism currently used is that of a centralised system which challenges the ideals of blockchain technology. Because of the redemption mechanism backing stablecoins such as USDT and USDC (the two largest), it is difficult to decentralised such a process as the peg may have a larger chance being lost which can have disastrous effects. There are certain new projects, some of which come from DeFi that are attempting to decentralize stablecoins as well.

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