The issuer of stablecoins Tether (USDT) froze three addresses on Ethereum (ETH), which together hold $160 million in assets. This information was confirmed by the company, which said it did so at the request of law enforcement, according to Coindesk.
According to data analysis site bloxy, Tether itself has so far frozen 563 addresses. Three of them are listed as having been blocked on January 13.
According to Etherscan.io, 576 accounts have been blocked by a stablecoin provider such as Tether and Circle (USDC).
One of these accounts has 818,756.12 USDT, and a total balance of 969,810 USD in over 100 coins.
Once accounts are blacklisted, the USDT balance is frozen and users can no longer transfer funds from these accounts.
Almost a year ago to the day, Tether told the South China Morning Post that it “works tirelessly to help law enforcement authorities catch criminals and interdict fraud”, and that it “will share information of its clients with law enforcement upon receipt of valid legal process,” adding:
“In fact, we’ve helped law enforcement and victims by freezing and restoring millions of dollars in USDT.”
This isn’t the first time Tether has done something like this, sometimes with multimillion-dollar addresses. In some cases, the funds were returned to their owners. Even so, it raised concerns about the degree of centralization on each occasion.
“This represents a fairly significant evolution of centralized stablecoin blacklisting activity,” said commented the lawyer Collins Belton on this recent news. “Given the size, I guess it can only be a few whales, an exchange/its affiliate, or a smaller state actor.”
Belton suggested it could also be individuals/groups involved in criminal activity, or trying to evade punishment.
As noted, the blockchain analytics company chain analysis found that scams continue to generate the largest stream of cryptocurrency-based crime in terms of transaction volume, with over $7.7 billion in crypto stolen across the world as of the end of December 2021.
However, the company also said this month that the legal use of cryptocurrencies is much higher than the illicit use.
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