Quote from: DdmrDdmr on September 02, 2020, 11:34:40 AM

Quote from: DutchDemon on September 02, 2020, 11:04:33 AM

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In the case scenario, I dont see how the court order can pinpoint an exact address in custody by the Exchange itself. User U is chased, and therefore his logical account on the Exchange is pursuable, but the inner distribution on customer assets to addresses (possibly and n:m relation) is not known (but to the Exchange themselves), and if the Exchanges Stablecoins are distributed over 100 addresses (cold storage and not), then how can the court order pinpoint an exact address that is being managed by the Exchange, but where user U had ties to?

In any case, I dont know what the Exchange would do, but it is at least morally responsible for the assets they have in custody, and the same as when a hack takes place they should try to reposition the customer balances at their own expense (when feasible, and the Exchange survives the hit), so would it seemingly apply here. A court order, eventually, will likely not penalize a whole collective for a single case on a shared custodial address. A Centralized Stablecoin issuer might.

You are talking about how court order would pass. But, court order will come to the Stable Coin issuer, not the exchange in question. Stable Coin issuer does not even need to know whether the address belong to an user or an exchange. They have the code to freeze any fund on any address. So, if they're served a legal notice that their Stable Coin is being used for illegal purpose and they find that 5k USD worth Stable Coin has reached an address having 5m USD worth Stable Coin, they can just freeze it. Right? In fact, none of the news of Stable Coin freezing do mention any sort of Court Order served to the address owner. So, as the affected end user, what an exchange owner can do, if the cold storage wallet is frozen?