Stablecoin Issuer Tether Won’t Freeze Tornado Cash Addresses, Says Premature Freezing Could Jeopardize Investigations

Stablecoin Issuer Tether Won"t Freeze Tornado Cash Addresses, Says Premature Freezing Could Jeopardize Investigations

While the crypto community is still talking about the U.S. government banning the ethereum mixing platform Tornado Cash, the stablecoin issuer Tether Holdings Limited revealed on Wednesday that the company would not “freeze Tornado Cash addresses.” Tether’s recently published blog post about the subject says the company is waiting for instructions from law enforcement. Tether Has No Plans to Freeze Tornado Cash-Associated Private Wallets and Is Waiting to Hear From Law Enforcement Officials

On August 8, the U.S. Treasury Department’s financial watchdog, the Office of Foreign Asset Control (OFAC), banned the ethereum mixing application Tornado Cash and ever since then, OFAC’s sanctions enforcement has been met with controversy. Of course, OFAC’s actions caused a ripple effect and a number of companies like Circle Financial’s and Coinbase’s Centre consortium, Github, and Discord took action. For instance, developers were suspended from Github, the Tornado Cash Discord server was deleted, and reports noted that Centre blacklisted dozens of ethereum addresses and froze 75,000 USDC. Tether Holds Firm on Decision Not To Freeze Tornado Cash Addresses, Awaits Law Enforcement Instruction https://t.co/zpsI9lKLlf

— Tether (@Tether_to) August 24, 2022

According to a blog post published by Tether Holdings Limited published 16 days after OFAC’s ban, the company explains that as of right now, it’s not freezing USDT assets held within the Tornado Cash mixer. Tether says the company works with law enforcement officials regularly and is in daily contact with “key law enforcement officers.” If a law enforcement official provides a legitimate request to freeze a private wallet, Tether “complies with the freeze,” but we do not freeze wallets of exchanges/services,” the company added.

Tether’s blog post continues: So far, OFAC has not indicated that a stablecoin issuer is expected to freeze secondary market addresses that are published on OFAC’s SDN List or that are operated by persons and entities that have been sanctioned by OFAC. Further, no U.S. law enforcement agency or regulator has made such a request despite our near-daily contact with U.S. law enforcement whose requests always provide precise details. Unilaterally Freezing Addresses Prematurely Could Be a Bad Move, Tether Says

Furthermore, Tether says that choosing to unilaterally freeze secondary market addresses very well “could be a highly disruptive and reckless move.” The company also detailed that there have been instances where law enforcement has told the company not to freeze suspected private wallets so the suspects of an investigation are not alerted and liquidate the funds. Tether’s blog post also calls out a number of stablecoin issuers like Paxos, a New York-based regulated company.

Tether said that Paxos did not freeze Tornado Cash wallets and the USDT’s issuer further noted that Makerdao, the issuer of the decentralized finance (defi) stablecoin DAI did not proceed with any type of freeze. However, Tether seems to disagree with the move made by USDC’s issuers. “We believe that, if made without instructions from US authorities, the move by USDC to blacklist Tornado Cash smart contracts was premature and might have jeopardized the work of other regulators and law enforcement agencies around the world,” the blog post on Wednesday added. Tags in this story Circle, DAI, Discord, ETH mixer, Ethereum Mixer, github, Law Enforcement, makerdao, Mixer, OFAC, OFAC’s SDN List, Paxos, Premature Freeze, Regulations, Sanctions, Stablecoin issuer, stablecoin issuers, Stablecoins, Tether, Tether Holdings, Tornado cash, U.S. Government, USDC, USDC Issuer, USDT

What do you think about Tether’s blog post that says it will not freeze USDT tied to Tornado Cash and that it is waiting for instructions from law enforcement? What do you think about the company’s commentary about USDC’s issuer blacklisting stablecoin wallets? Let us know what you think about this subject in the comments section below. Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today. Accused Bitfinex Bitcoin Money Launderer Heather ‘Razzlekhan’ Morgan Speaks for the First Time Since Her Arrest NEWS | 50 mins ago John McAfee Is Alive, Hiding Out in Texas, Ex-Girlfriend Claims in Netflix Documentary NEWS | 5 hours ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleJohn McAfee Is Alive, Hiding Out in Texas, Ex-Girlfriend Claims in Netflix Documentary Next articleAccused Bitfinex Bitcoin Money Launderer Heather ‘Razzlekhan’ Morgan Speaks for the First Time Since Her Arrest Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"

The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Tony Hawk"s Latest NFTs to Come With Signed Physical Skateboards Bill ‘On Digital Currency’ Caps Crypto Investments for Russians, Opens Door for Payments Fed"s Bullard Wants to Raise Bank Rate to 3.5% by Year"s End, Hints at 75 Basis Point Rate Hike Terra"s Algorithmic Dollar-Pegged Crypto UST Is Now the Third-Largest Stablecoin