{General Discussion} Treatment of Tether Blacklisted Addresses

Problem: Designating Risk Category and Risk Score to addresses blacklisted by the USDT issuer Tether. Blacklisted addresses do not display any category of risk or any indication of the reason for the blacklisting of an address.

As HAPI is a protocol that aggregates from different data sources to establish a multifaceted and diverse database, Tether is deriving its blacklisting reason, in some cases, from unknown sources.

Question: What would be a) the process of deciding a risk category of an address blacklisted by Tether in this instance. Would it be a separate category or an attempt to find a definitive reason of blacklisting and adding it to the existing categories and in the case of absence of definitive reason not adding it at all; and b) the treatment of such cases going forward when there is only one source of information published by semi-reputable, and reliant source.

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Here is how I think about it:

One of HAPI Protocol’s main goals has always been transparency.
This transparency is lost if there can’t be a reason found for the blacklisting of an specific address.
If data form other sources give reason for an before “unspecified“ blacklisting then said address should be labeled with its respective risk score.

To stop HAPI from becoming a tool for political censorship or corruption, the blacklisting of an address for unknown reasons should definitely not be labeled with an risk category where the reason of blacklisting is usually known.

However, given the credibility of the source of said blacklisted address, the blacklist might actually hold weight, therefore it mustn’t be neglected.

Going forward those addresses should be included into the database, however a unknown reason for blacklisting should be a separate category until a reason for said address can be found and the address can be migrated into its respective category.

A “under review“ tag might help.
If the source and the reason can be verified by other reporters the tag should be removed.

If a reason for blacklisting cannot be found the blacklisted address should be removed form the database after a time x.

Innocent until proven otherwise should be the bar set for our database.

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I think that we should not add data to protocol that we can’t identify. Maybe we’ll be able to establish a connection with Tether to retrieve the category, then we would have enough data to act on it.

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Great suggestion Andrei, but what if we can’t access that data ? I recon timing is crucial in case of a hack, maybe a 12 hour cooldown before the data must be submitted ? Only for reporters with credibility of course

It’s not processed by hand and you can’t just add a “Whatever” category and random risk score.

We can’t compromise the protocol because someone can’t follow it in time. I’m pretty sure that there are people who maka a decision to block addresses on a particular token and they can be approached.

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Sounds reasonable, good point. I changed my mind, Andrei is right.

A “whatever“ category with a random risk score doesn’t really make sense in afterthought.

In Summary: No risk score = Not in the HAPI Database

Tether is a reputable organization and only bans addresses if they have a good reason to do so, so by not adding these addresses to the protocol, you underestimate the value of the protocol itself.

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A separate category if it is not possible to determine a category from existing ones.

Yes, but from a perspective of a protocol consumer, how do you actually react to a notification about an address that has a high risk but no category?