USDC stable coin has the ability to blacklist addresses so all transfers to and from the accounts can be stopped by law enforcement
Description
The USDC stable coin creators provided a mechanism to blacklist addresses from being able to send or receive transactions. This has previously been used by US law enforcement to freeze funds in an account so they cannot be accessed.
Impact
Law enforcement can ask CENTER the creator of the USDC smart contract to blacklist the addresses of the Mafia's contract(s) where funds are stored. Preventing the Mafia from accessing any of their funds and denying transactions with USDC and CrimeMoney.
Proof of Concepts
N/A
Recommended mitigation
One way to mitigate this is to use another type of coin that does not support blacklisting.
References
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Explanation of USDC
https://www.gemini.com/cryptopedia/what-is-usdc-stablecoin-circle-crypto -
An article about USDC blacklisting an address
https://cointelegraph.com/news/centre-freezes-ethereum-address-holding-100k-usdc
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