ethscamcheck.io, so we’ve decided to put together a short note explaining what they are.
- Where suspected theft, scams, or fraud-related activity has occurred. Tether and Circle publicly state that they work closely with law enforcement in circumstances where they suspect their tokens have been used in illicit activities. Since 2017, these organisations have been banning such addresses from using USDT or USDC on Ethereum. Reportedly, these steps are often taken upon a request from US law enforcement, although at this stage only limited detail on such bans has been provided by Tether and Circle.
- **It is perhaps important to remember that these actions do not necessarily confer heightened risk to users interacting with a ‘blocked’ address. They are usually in response to a specific transaction which is deemed suspicious or potentially malicious. Some appear to be cautionary measures rather than the result of definitive law enforcement actions, although there are some exceptions to that rule. Also, in most cases, ETH and other ERC-20 tokens can still be traded freely with banned addresses.
We expect bans to continue as further regulatory pressure is placed on protocols to monitor their own networks and impose restrictions where certain thresholds are met. Though it should be noted that this is only really practicable with more centralised organisations such as Tether and Circle.