Accepting centralized tokens as collateral (like WBTC) would give OFAC an instant kill switch

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Two months ago OFAC sanctioned two bitcoin addresses. It's an instant ban and there's no way to protect against it, kyc/aml or not.
Once DAI backed by centralized collateral would grow big enough to make bailout by mkr issuance impossible (due to lack of enough liquidity) all OFAC would have to do is sanction appropriate addresses, making the collateral instantly worthless. The supposed reason for the block (a supposed terrorist used it or whatever) doesn't even have to be true - OFAC has effectively dictatorial powers.

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nootropicat

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Posted: 5 years ago
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