On Friday, Chad Barraford, technical co-founder of THORChain, stated that Tether had blacklisted vault addresses linked to the decentralized cross-chain liquidity protocol, freezing a total o
On Friday, Chad Barraford, technical co-founder of THORChain, stated that Tether had blacklisted vault addresses linked to the decentralized cross-chain liquidity protocol, freezing a total of $1.45 million in USDT across four separate wallets. The funds remained inaccessible for several hours before Tether lifted the freeze and restored normal activity.
Barraford, who is a key developer behind THORChain’s infrastructure, shared the developments on X, reporting that Tether acted without prior communication and did not provide an explanation for the move. He explained that THORChain’s development team was left uncertain about the reasons for the action and attempted to contact Tether directly during the incident.
“We don’t know why this choice was made and have had no comms with USDT before this action and are actively reaching out to have a conversation,” Barraford wrote on social media, prior to the unfreezing.
“We hope that this was made in error / misunderstanding.”
Trading on the affected wallets resumed within roughly two hours after the assets were unfrozen. Neither Tether nor THORChain provided further comment on the matter immediately after the incident.
Mini dictionary: THORChain is a decentralized protocol designed to facilitate cross-chain liquidity and asset swaps without requiring users to give up custody of their tokens.
Tether, the company behind the USDT stablecoin, can freeze or unfreeze assets to comply with law enforcement requests or mitigate suspicious activity, as has occurred in previous high-profile cases.
This recent incident follows a pattern of similar actions involving Tether. Just days earlier, Conduit Technology, a cross-border payments platform, filed a lawsuit against the stablecoin issuer. The lawsuit alleges that Tether froze $2.76 million in USDT associated with a wallet under investigation by Brazilian authorities during 2024.
In August, two Thai nationals also initiated legal proceedings against Tether, claiming the company froze $42.4 million in USDT. According to those claims, the freeze was prompted by an “informal request” from US Homeland Security Investigations, once again highlighting Tether’s broad discretion to restrict asset movement on its platform.
Incident Date Amount Frozen Reason THORChain vaults April 2024 $1.45 million Not disclosed Conduit Technology 2024 $2.76 million Brazilian investigation Thai nationals August 2023 $42.4 million US Homeland Security requestThe pattern of unilateral asset freezes by Tether has become a subject of concern among users and industry observers, leading to calls for clearer policy explanations and greater transparency from the stablecoin issuer.
Tether’s practices have begun to attract the scrutiny of lawmakers and regulatory bodies. Recently, Cantor Fitzgerald, a New York-based financial services firm, faced questions from Senate Democrats regarding its business relationships with Tether, as concerns continue to build around the company’s operational transparency and compliance practices.
As legal and regulatory scrutiny intensifies, Tether’s approach to asset management and blacklisting is likely to remain in the spotlight among both industry participants and government authorities.
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