Member-only story
A thief will prefer the money that can’t be confiscated or frozen. The base settlement money. That was our thesis.
Now, we get to see this thesis play out in real-time as we watch the KuCoin hacker frantically try to liquidate over $150m in stolen funds even as centralized token issuers try to freeze and pause the stolen tokens. Here’s what we’re seeing.
Table of contents
Centralized issuers froze the hacked funds (e.g. USDT, AMPL, OCEAN)
Less centralized issuers didn’t freeze the hacked funds (e.g. SNX)
Completely decentralized issuers can’t freeze funds (e.g. ETH and BTC)
Centralized issuers froze the hacked funds (e.g. USDT, AMPL, OCEAN)
It’s silly to steal Tether. Why? The issuer can freeze the Tether you stole. Tether itself isn’t a bearer asset-it’s an IOU for money. BitFinex can freeze your stolen USDT, issue new supply, and look like a hero for catching the bad guy.
And that’s exactly what they did to the $33m in Tether stolen by the KuCoin hacker.
This hack showed that a lot of tokens fall in the category of centralized issuer willing to freeze. Some more surprising than others-this from AMPL for instance:
