The CENTRE Consortium blacklisted a USDC address in response to a law enforcement request, freezing $100,000 worth of the stablecoin, a spokesperson said Wednesday.
CENTRE, which issues the dollar-pegged USDC on top of the Ethereum blockchain, confirmed the move, though Circle spokesperson Josh Hawkins, speaking on behalf of the joint Circle-Coinbase operation, said he could not provide any specifics about the blacklisting, which appears to have occurred in mid-June.
“Centre can confirm it blacklisted an address in response to a request from law enforcement. 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 company’s statement said in its entirety.
A transaction on Etherscan indicates that CENTRE called a “blacklist(address investor)” function on an address, essentially freezing all coins on it. It was not immediately clear who owned the address.
“When an address is blacklisted, it can no longer receive USDC and all of the USDC controlled by that address is blocked and cannot be transferred on-chain,” according to a policy document shared with CoinDesk.
The incident underscores the limits of decentralization when regulated businesses interact with permissionless networks. While USDC runs on a public blockchain, where normally funds are under user control, in order to remain compliant CENTRE wields the power to sanction certain accounts.
Read more: Ledn Launches USDC Stablecoin Savings Accounts With Focus on Latin America
Only the consortium itself can blacklist addresses, not any individual USDC issuer, the document said.
This appears to be the first time an address was blacklisted, as noted in an earlier report by The Block.
USD/CAD
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