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Circle CEO fails to dismiss allegations USDC users can be blocked


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Founder of the Daily Gwei newsletter, Anthony Sassano, claims that USDC accounts can be blocked.

Expanding further, Sassano said USDC issuer Circle can freeze the tokens โ€œin any address at any time for whatever reason.โ€ He added that this is the risk associated with using any centralized service.

Circle CEO and co-founder Jeremy Allaire responded by calling Sassonโ€™s claims inaccurate and unhelpful FUD while linking a blog article posted in May, titled, โ€œWhy developers can trust USDC.โ€

Stablecoins under fire

Recent events in the crypto space have put the spotlight firmly on stablecoins. In particular, the UST implosion, which collapsed 98% in value from its dollar price before being abandoned, sent shockwaves across the entire digital asset industry.

Since then, a spate of de-pegs, albeit not to the same extreme as UST, have investors nervous over the soundness of stablecoins in general.

This has been noted by mainstream publications, with the FTโ€™s Hilary Allen, a professor at the American University Washington College of Law, going as far as questioning whether stablecoins should exist at all.

Similarly, the Bank for International Settlements (BIS) recently launched an โ€œInnovation Hub,โ€ which encompasses several projects that intend to explore cyber security. The press release states that the cryptocurrency market intelligence platform element directly responds to mitigating stablecoin and DeFi risk.

โ€œThe collapse of many stablecoins and decentralised finance (DeFi) lending platforms has highlighted the difficulty in assessing their risks and economic potential.โ€

Circle boss writes off USDC blocklist claims as FUD

Rather than address Sassanoโ€™s claims directly, Allaire linked a blog post on the merits of trusting USDC. It opens by referring to the UST disaster while using a series of Q and As to build a case for USDC being different.

Under the question, โ€œIf I use USDC in my protocol/application, can my protocol/application be blocked?,โ€ the answer states, โ€œCircle and the Centre Consortium only block addresses when we are legally required.โ€ The response goes on to say this happens in respect of court orders and sanction compliance.

โ€œOf the total $53B+ USDC in circulation, only $2.7M USDC is currently blocked. A total of 38 unique addresses have ever been blocked to date, all of which comply with OFAC sanctions and court orders.โ€

In addition, the post also states Circle has a legal obligation to enforce Know Your Customer (KYC) controls, monitor transactions, and watch for โ€œsanctions screening.โ€

Sassano responded by saying the blog confirmed his previous allegation, even detailing the amount of funds currently being blocked. He signed off by denying this was an attempt to FUD the token.

Posted In: , Stablecoins





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