The CENTER Consortium blacklisted a USDC address in response to a law enforcement request, freezing $ 100.000 from the stablecoin, a spokesman said Wednesday.
CENTER uses the blacklist option as required by its Policy
CENTER, which issues the USDC hooked to the dollar on the Ethereum blockchain - here the quotation in real time - confirmed the story, although Circle spokesman Josh Hawkins, speaking on behalf of the Circle-Coinbase joint operation, said he could not provide details of the incident, which appears to date back to mid-June.
“Circle can confirm that it has blacklisted an address in response to a law enforcement request. While we cannot explain the details of law enforcement requests, Circle respects the binding judicial orders imposed by the jurisdiction that acts on the organization, "says a company statement.
It was not immediately clear who owned the address. "When an address is blacklisted, it can no longer receive USDCs and all USDCs controlled by that address are blocked and cannot be transferred to the chain," according to the Policy.
The accident highlights the limits of decentralization when regulated companies interact with networks without authorization. While USDC works on a public blockchain, where funds are normally under user control, to remain compliant CENTER exercises the power to sanction certain accounts.
Only the Consortium itself can blacklist addresses, not a single USDC issuer, the document says. This appears to be the first time an address has been blacklisted, as noted in a previous report from The Block.
Weights and counterweights
CENTER reserves the right to blacklist addresses in two circumstances. The first occurs in the event of a potential security breach or other threat to the network, according to the Policy document shared with the media.
Furthermore, according to the document, CENTER will use the blacklist function "to comply with a law, regulation or legal order of a duly recognized American authority, a US court of competent jurisdiction or another governmental authority with jurisdiction over CENTER".
Either way, the majority of CENTER's Board of Managers - which includes Circle co-founder and CEO Jeremy Allaire, Coinbase's chief financial officer Alesia Haas and Impossible Foods legal manager Dana Wagner - must vote to approve any blacklist .
They could only object to this request if there were shared funds on a platform or if blacklisting the address represented a risk to the network, the document says.
USDC issuers must notify users of the blacklisting feature by including a statement in their user agreements, the regulation says. “To ensure effective supervision by CENTER of this Policy, the consortium will report regularly, the most up-to-date list of addresses in the blacklist, the amount of frozen USDC tokens and the corresponding legal reserves applied.
In addition, this information will be verified and publicly communicated by means of a monthly statement from the external accounting company of CENTER ", it is written in the document.
