Tether, the most capitalized stablecoin issuer with a market capitalization of $78.4 billion, has added three Ethereum addresses, containing over $160 million of USDT stablecoin among them, to its blacklist.
According to a company spokesperson, the company did so in compliance with law enforcement instructions. you read, “Today, Tether has frozen three addresses on the Ethereum blockchain containing $160 million USDT at the request of law enforcement. At the moment we cannot reveal any other details.”
As a centralized company, Tether can blacklist addresses that it believes are involved in crime, money laundering, or any other reason.
Read: Tether executives could face criminal charges
What you should know
Tether, which issues tokens on several blockchains, began blacklisting addresses after a November 2017 breach in which the company said $30 million in USDT had been stolen.
This is the first time Tether has blacklisted an address in 2022, but according to the Blocky block explorer, it added 312 addresses to the blacklist last year and has added 563 addresses since it first did so in November 2017.
Read: CFTC fines Tether and Bitfinex $42.5 million
As mentioned earlier, Tether did not reveal details about why the three new addresses were blacklisted, however, it used its power to blacklist addresses implicated in cyberattacks and law enforcement investigations. An example of this is the September 2020 Kucoin hack, where Tether froze about $35 million to prevent hackers from taking advantage of their theft.
Concerns about the lack of decentralization may be a factor driving the adoption of TerraUSD (UST) from the algo stablecoin blockchain Terra. It is currently the fourth largest stablecoin with a market capitalization of $10.62 billion. However, the market size of the decentralized competitor still pales in comparison to USDT, which is the third largest cryptocurrency overall with a market capitalization of $78.5 billion.
Read: Stablecoin Sector Grows to Nearly $140 Billion in 2021
Terra founder Do Kwon tweeted in response to news of Tether’s actions that there is no way to blacklist UST addresses. He said , “Unknown no blacklist key for $UST.”