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Companies absolutely can "disable" trading by certain shareholders. This is what an IPO lock-up is, where insiders cannot sell their shares until 6-12 months a

Companies absolutely can "disable" trading by certain shareholders. This is what an IPO lock-up is, where insiders cannot sell their shares until 6-12 months after the conclusion of the IPO. It's also what a trading blackout is, where employees cannot trade shares between the end of the quarter and release of earnings. These are very common - almost everyone who works for a public company has encountered them. These cases are temporary, but I suspect there are also permanent trading bans that might be caused by legal action - if, for example, an employee is found guilty of a crime, or is under a wage garnishment order. Also, crypto has long had the phenomena of coins that get "locked" and can never be touched or transferred again, simply through holders that have died or lost the private key. For example, the original "Satoshi coins" - the roughly 1M Bitcoin (~$45B at today's prices, enough to make their holder the 27th richest person in the world) mined by Satoshi before Bitcoin became mainstream - have never been spent, and it's likely that their owner is dead. They simply drop out of circulation, and the price of all other Bitcoin rises to compensate.

wolverine876 3y ago
Good points about trading that's disabled. I just wonder what is the same and different about cryptocurrencies like Tether's. > They simply drop out of circulation, and the price of all other Bitcoin rises to compensate. Would that be different for Tether? Isn't Tether a 'private' blockchain that the company controls?
- nostrademons 3y ago
  The difference with Tether is that its value is ostensibly pegged to the dollar, with each Tether being backed 1:1 with real dollar reserves. So its price doesn't float with supply & demand. Instead, for each Tether that is "locked", it's one less person who has a claim on Tether Ltd's bank reserves. It's debatable whether Tethers are actually backed by dollars 1:1; people have long suspected that Tether Ltd mints them out of thin air based simply on promises (i.e. fraud). And occasionally the price has dropped below $1 as suspicions grow and folks try to exit Tether. So it's good for the company to have Tether holder accounts locked, as it means they have fewer liabilities and less chance of a bank run.

wolverine876 3y ago

Good points about trading that's disabled. I just wonder what is the same and different about cryptocurrencies like Tether's. > They simply drop out of circulation, and the price of all other Bitcoin rises to compensate. Would that be different for Tether? Isn't Tether a 'private' blockchain that the company controls?

nostrademons 3y ago
The difference with Tether is that its value is ostensibly pegged to the dollar, with each Tether being backed 1:1 with real dollar reserves. So its price doesn't float with supply & demand. Instead, for each Tether that is "locked", it's one less person who has a claim on Tether Ltd's bank reserves. It's debatable whether Tethers are actually backed by dollars 1:1; people have long suspected that Tether Ltd mints them out of thin air based simply on promises (i.e. fraud). And occasionally the price has dropped below $1 as suspicions grow and folks try to exit Tether. So it's good for the company to have Tether holder accounts locked, as it means they have fewer liabilities and less chance of a bank run.