Centre Obliges Government Request, Freezes Address With $100,000 USDC

Centre Consortium has blacklisted an ethereum address holding $100,000 in USDC, a move that the entity says was “in response to a request from law enforcement.”

A joint venture between Circle and Coinbase, Centre is the issuer of the dollar-pegged USDC stablecoin, which runs on the Ethereum blockchain. It may be the first time that an address has been blacklisted.

According to a record of transactions on Etherscan, Centre called a “blacklist(address investor)” function on the address in question. The action effectively froze all the money in the address. It’s not clear who owns it.

Blacklisting means an address will no longer be able to receive or send USD Coin (USDC) through the stablecoin’s smart contracts, Centre explains on its website. All USDC balances held in blacklisted addresses may be lost forever, it adds.

“Centre can confirm it blacklisted an address in response to a request from law enforcement,” a Circle spokesperson, speaking on behalf of Centre, was quoted as saying by industry media.

“While we cannot comment on the specifics of law enforcement requests, Centre complies with binding court orders that have appropriate jurisdiction over the organization,” the spokesperson said.

Centre’s relationship with government authorities is something that throws into doubt the “myth” of decentralization commonly associated with cryptocurrency. It shows how heavily government whims have been imposed upon investors and exchanges.

This new wave of regulation poses a contradiction in that some of cryptocurrency’s strongest traits have always been privacy and autonomy.

Now, as Centre demonstrates, individuals looking to operate in an insular system, away from a central bank and state oversight, are increasingly confronted with new top-down demands, which include the freezing accounts.

However, the blacklisted address appears to have a shady history. A comment to the address alleges:

Hello unknown thief, you are in contact with this eth address 0xEeC84548aAd50A465963bB501e39160c58366692 and you stole 10,000 Loopring Coin (750 euros) from my wallet. I am now giving you a chance to send the 10,000 Loopring Coin back to me. You already know my [ethereum] address. If you do not do this, I will report you anywhere with your two known addresses.

Officials at Centre did not disclose the reasons that led to the blacklisting, as demanded by the law enforcement agencies.

What do you think about Centre blacklisting this address? Let us know in the comments section below.

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