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I guess I sort of know I'm an semi-ignorant trying-to-pretend-like-im-not crypto guy, but can you help me understand how some authority going to take away my e

by k8svet 3y ago

I guess I sort of know I'm an semi-ignorant trying-to-pretend-like-im-not crypto guy, but can you help me understand how some authority going to take away my erc20 usdt, held on my Ledger?

yieldcrv 3y ago
Tether can freeze or nullify the transfer capability of any USDT at any address. They can and have done this arbitrarily, they can cite a skittish corporate policy at preventing money laundering, they can do it in response to what they consider to be a rug or exploit address, they can do it in response to addresses that received funds from the aforementioned exploit address from their perspective, they can also do it in response to any court order from any country they care about listening to and you’ll never see the order yourself all of these things have occurred in the near …decade… of its circulation. fairly routine operation just like any financial institution does, except now you can watch the frozen funds for all eternity and quantify them
- k8svet 3y ago
  So, I guess you're saying the erc20 contract for USDT has a backdoor builtin? On the one hand, I feel like I would've heard about this before, but on the other hand, I don't follow crypto circles off HN and the crypto discourse here is... well, not very deep. Not to sound skeptical, I'm going to go read more and really appreciate your comments.
  - DANmode 3y ago
    > crypto discourse here is... well, not very deep. You can say that again.
  - yieldcrv 3y ago
    yeah, USDC has the same function along with GeminiUSD by the Winklevoss twins and PaypalUSD all the “money in a bank account” stablecoins have a similar structure. It isnt based on any resolved regulatory appeasing, its just what they wanted to do and imagined would be helpful for regulatory compliance, but it also lets them just freeze anything and keep collecting interest on the associated dollars and never needing to have it available for redemption its a decent business model here is USDT’s contract code https://etherscan.io/address/0xdac17f958d2ee523a2206206994597c13d831ec7#code https://etherscan.io/address/0xdac17f958d2ee523a220620699459... in the outline you can look is the “addToBlacklist” method, alongside the “destroyBlacklistFunds” method not only can they freeze your address’ ability to transfer, they can unilaterally subtract your balance it is a centralized asset that simply settles faster on distributed ledger technology like blockchains there are a couple decentralized attempts at the same model using overcollateralization and no central issuer or central control or freezing function, DAI is the closest.

by k8svet 3y ago

I guess I sort of know I'm an semi-ignorant trying-to-pretend-like-im-not crypto guy, but can you help me understand how some authority going to take away my erc20 usdt, held on my Ledger?

yieldcrv 3y ago

Tether can freeze or nullify the transfer capability of any USDT at any address. They can and have done this arbitrarily, they can cite a skittish corporate policy at preventing money laundering, they can do it in response to what they consider to be a rug or exploit address, they can do it in response to addresses that received funds from the aforementioned exploit address from their perspective, they can also do it in response to any court order from any country they care about listening to and you’ll never see the order yourself all of these things have occurred in the near …decade… of its circulation. fairly routine operation just like any financial institution does, except now you can watch the frozen funds for all eternity and quantify them

k8svet 3y ago
So, I guess you're saying the erc20 contract for USDT has a backdoor builtin? On the one hand, I feel like I would've heard about this before, but on the other hand, I don't follow crypto circles off HN and the crypto discourse here is... well, not very deep. Not to sound skeptical, I'm going to go read more and really appreciate your comments.
- DANmode 3y ago
  > crypto discourse here is... well, not very deep. You can say that again.
- yieldcrv 3y ago
  yeah, USDC has the same function along with GeminiUSD by the Winklevoss twins and PaypalUSD all the “money in a bank account” stablecoins have a similar structure. It isnt based on any resolved regulatory appeasing, its just what they wanted to do and imagined would be helpful for regulatory compliance, but it also lets them just freeze anything and keep collecting interest on the associated dollars and never needing to have it available for redemption its a decent business model here is USDT’s contract code https://etherscan.io/address/0xdac17f958d2ee523a2206206994597c13d831ec7#code https://etherscan.io/address/0xdac17f958d2ee523a220620699459... in the outline you can look is the “addToBlacklist” method, alongside the “destroyBlacklistFunds” method not only can they freeze your address’ ability to transfer, they can unilaterally subtract your balance it is a centralized asset that simply settles faster on distributed ledger technology like blockchains there are a couple decentralized attempts at the same model using overcollateralization and no central issuer or central control or freezing function, DAI is the closest.