Tether, the owner and operator of the world’s largest stablecoin network, blacklisted three Ethereum addresses on Thursday and effectively froze $150 million in USDT split between them.
Key points to remember:
- According to blockchain explorer Bloxy, Tether froze funds simultaneously around 4:30 p.m. UTC on January 13. Although the exact reason for the decision is not yet known, Tether holds the power to freeze addresses that engage in criminal financial acts, such as money laundering.
- Adding three new addresses to the blacklist marks the first time Tether has done so this year. In the four and a half years since the blacklist was introduced, Tether has added 563 addresses to the list, with the vast majority coming last year when 362 addresses were blacklisted.
- Given its centralized structure, Tether is able to wield its power and control USDT funds at its discretion. This goes against the fundamental principle of crypto and has sparked a lot of debate in the crypto community over the years, with many members believing that Tether holds too much power.
- While USDT is still the largest stablecoin, with a market capitalization of $78 billion, competitors are catching up fast. USD Coin, for example, has grown exponentially over the past two months and currently commands a valuation of $45 billion.
- Algorithmic stablecoins, notably Terra’s UST, are also on the rise. The UST is pegged to the value of the US dollar through a complex mechanism of smart contracts and is fully decentralized. Following the announcement of a new batch of blacklistings, the founder of Terra Do Kwon tweeted that “there is no blacklist key for $UST,” subtly implying his disagreement with Tether’s actions.
David is a crypto enthusiast and personal finance expert. He has created numerous publications for different platforms. He loves exploring new things, and that’s how he discovered blockchain in the first place.
