Being the world’s leading stablecoin will often attract a lot of attention. Tether is often under fire for a wide variety of reasons. The continual freezing of Ethereum accounts will undoubtedly spark even more debates.
What is Tether Doing?
Tether’s USDT stablecoin is currently issued on a multitude of blockchains. This includes Ethereum, OMNI, and TRON as the primary layers generating liquidity. It now seems that something might be going on with specific addresses receiving or sending ERC-20 USDT tokens.
More specifically, the Tether contract on Ethereum has a very specific function. Known as AddedBlackList, it confirms when an address is officially blacklisted. Pursuing this course of action seems to be rather definitive, as these addresses should automatically be flagged by exchanges as well.
Going through the contract history, there have been quite a few blacklisted addresses so far. At least 25 have been recorded to date, which is rather interesting to keep an eye on.
It is apparent that Tether is stepping up its game in 2020. A total of 22 accounts were frozen this year alone, and the month of July has only just begun. The other addresses on the list were frozen in 2019, which is fairly interesting in its own regard.
Hefty Balances Being Frozen
As is usually the case, some people will closely analyze these trends. Everything that Tether does will be scrutinized, either for better or worse. In this particular case, Eric Wall is keeping close tabs on what is going on exactly.
Tether (USDT) has frozen another 22 Ethereum accounts this year.
3 of these 22 had ~994k USDT between them in total. pic.twitter.com/22WQiiKgrT
— Eric Wall (@ercwl) July 9, 2020
Based on his research, several of the recently frozen addresses hold major amounts of ERC-20 USDT. Nearly $1 million in frozen funds belongs to just three of the 22 addresses in question. One frozen address received $939,000 in USDT from Binance, It was frozen 22 hours later, raising a lot of questions.
In total, it would appear that nearly $5.5 million in ERC-20 Tether is currently frozen. Whether the funds will ever be unlocked again, seems rather unlikely. This particular trend does raise a lot of questions. One thing’s for sure: Tether is not just freezing funds on Ethereum.
Explaining This Behavior
Several reasons can contribute to having specific addresses frozen. Running a scam or Ponzi Scheme, for example, is likely to get one noticed rather quickly. Another potential reason is erroneous freezing of accounts, although all of these actions seem rather targeted.
Due to its growing popularity, criminals are automatically drawn to USDT. It is a digital version of the US Dollar and one that can be exchanged into many different cryptocurrencies.
Ensuring those criminals can’t abuse the system is crucial, It is likely to assume that there will be more addresses to be frozen in the future.
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