Centre, the company behind the issuance of the USDC stablecoin, has blacklisted an Ethereum address with $100,000 due to a law enforcement request.
The rate at which digital currencies are gaining traction around the world is in part related to crypto-companies’ compliance with government regulations. This compliance framework has caused Centre, the company behind the issuance of the stablecoin USDC to freeze an Ethereum address with $100K in USDC locked in. The restriction has been attributed to requests from law enforcement agencies.
Here’s the statement from Centre confirming the blacklisting of the address with $100K in USDC:
“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.”
While the identity of the affected owner is yet unknown, a transaction on Etherscan indicates that Centre recorded a “blacklist (address investor)” function on an address, basically freezing all of the coins on it. The company has claimed it reserved the right to do this.
Cyber Criminals Adopt Cryptocurrencies
One of the major characteristics of digital currencies (cryptocurrencies) is their anonymity, a feature that has attracted cybercriminals to take payments with cryptocurrencies. The involvement of cybercriminals with digital currencies has been enhanced over the years with the emergence of privacy coins which offers complete anonymity of transactions and users.
USDC is a digital stablecoin that is pegged to the United States dollar. Each USDC is backed by a dollar held in reserve. USDC is generally not the best choice of digital currency for the perpetration of crime but the frozen account has been known to be used to scam people.
Centre’s Support of Regulation
In order to fight cryptocurrency-related crime, Centre has policies that give it exclusive rights to blacklist suspected accounts. The conditions upon which Centre will blacklist an account include a potential security breach or other threat to the network and “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.” according to the company’s statement. For both conditions to pass, executives of the group of companies that make up Centre must vote for the blacklisting to pass. Based on Centre’s protocol, a blacklisted account may be reversed by the company and warned that blacklisted addresses may be unrecoverable.
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