Tether address on Ethereum was frozen with over 1 million USDT

Key facts:
  • The reasons for the lockdown are not known, but there could be an investigation into the funds.

  • Tether has already done the same with over 500 Ethereum addresses.

Tether, the developer of the eponymous stablecoin (USDT), froze an address that contained more than 1 million units of the cryptocurrency. Given its parity with the US dollar, this sum is equivalent to more than 1 million in US currency.

For the affected address, the blockade implies the impossibility of moving the funds as long as this measure is maintained. As published The Block, this is the address added to Tether’s “black list”, from this transaction.

According to this source, a Tether spokesperson assured that these actions are result of joint work between the company and regulatory bodies around the world to prevent scams or hacks. However, no further details were released on this particular case.

The locked address with its balance of more than one million USDT. Fountain: Etherscan

The fact that the funds still remain at the address in question is a sign that it is under investigation by authorities, the Tether spokesperson said.

The blocked address also has many other tokens that total more than USD 140,000, although in none of them the value reaches USD 24,000. For example, in the balance you can find chainlink (LINK), decentraland (MANA), sand (SAND) and uniswap (SWAP) units, among others.

Blocking funds is a risk of centralization

From Tether they point out that an action like this allows the company to help recover stolen funds through hacks or prevent this type of crime. They can even reverse transactions carried out to the wrong addresses and correct other similar failures when operating with the cryptocurrency, as has been reported on occasions reported by this medium.

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While this is a real advantage, it should also be noted that it is a characteristic of centralized networks. Tether, which does not have its own blockchain but is an ERC-20 token in Ethereum or TRC20 in Tron, is a centralized cryptocurrency, as explained in this article from the Cryptopedia.

This means that the issuance of the tokens depends on a group of people, as in this case the board of a company. These have the power to reverse or censor transactions, something that would not be possible in decentralized networks such as Bitcoin or Ethereum.

According to The Block’s Data Dashboard, Tether already has more than 500 addresses locked on Ethereum. This blocking practice by the company started in 2017.

But Tether is not the only stablecoin issuer to have taken such action. As CriptoNoticias reported, addresses with funds in USD Coin (USDC) have already been frozen in the past.

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The frozen addresses in Tether have grown remarkably in the last year. Fountain: The Block

As well as Tether and Circle (issuer of USDC), other companies that guard cryptocurrencies of their users usually solve situations in this way. A similar episode happened recently with the Binance exchange in Colombia. At that time, many user accounts were blocked on the grounds that US and Dutch authorities were investigating transactions with them.

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Tether address on Ethereum was frozen with over 1 million USDT

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