Sassano said USDC Circle issuers can freeze tokens “at any address at any time for any reason.” He argues that this is a risk associated with using any centralized service.
Circle CEO and co-founder Jeremy Allaire reacted to the allegation by calling Sasson’s claims FUD. However, apart from that, he was not given any more helpful information…
Recent events in the cryptocurrency market have led people to focus on stablecoins. In particular, the failure of UST has caused a shock wave across the industry. Since then, a series of sell-off events, although not as extreme as the UST, have worried investors about the future of stablecoin. Even mainstream publications, such as those of Hilary Allen of FT, a professor at the American University of Washington Law, have questioned whether stablecoins should exist.
Similarly, the Bank for International Settlements (BIS) recently launched the ‘Innovation Hub,’ which includes several projects exploring cybersecurity. The press release said that the crypto market’s smart platform element responds directly to stablecoin and DeFi risk mitigation.
Going back to the story, instead of addressing Sassano’s claims, Allaire linked to a blog post about the value of trusting the USDC. This article begins by referring to the UST disaster while using a series of questions to build a different case for USDC. In the question, “If I use USDC in a protocol/ application, is my protocol/application blocked?” the answer states, “Circle and Center Consortium only block addresses when legally required.” The response went on to say that this was only by court order and compliance with the sanction.
“Currently, out of a total of USDC 53 billion in circulation, only USDC 2.7 million is blocked. Thirty-eight unique addresses have been blocked, all in compliance with OFAC sanctions and court orders.”
In addition, the post states that Circle has a legal obligation to enforce Know Your Customer (KYC) controls, track transactions, and monitor sanctions screening. Sassano responded by saying the blog had confirmed his previous allegations, even detailing the amount currently frozen. You claim it’s all FUD.
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