Stablecoin-Issuer Tether “Standing Firm” on Not Freezing Tornado Cash Addresses – Here’s Why

Stablecoin-Issuer Tether “Standing Firm” on Not Freezing Tornado Cash Addresses – Here’s Why

Stablecoin-Issuer Tether “Standing Firm” on Not Freezing Tornado Cash Addresses – Here’s Why

The issuer of the most widely used stablecoin claims that it does not freeze addresses linked to sanctioned crypto mixer Tornado Cash.

Earlier this month, the Treasury Department’s Office of Foreign Assets Control (OFAC) announced it was banning Americans from using Tornado Cash, saying the service posed a threat to national security.

In a new statement, USDT issuer Tether says that pending a direct request from authorities, it will not prohibit transactions with addresses linked to Tornado Cash.

Tether says that while it usually responds to requests from law enforcement to freeze some private wallets, it has yet to receive a ban notice from Tornado Cash addresses that were recently included in the Nationals list. Specially Designated and Blocked Persons (SDN) of OFAC.

“Tether has not been contacted by US officials or law enforcement with an OFAC-sanctioned address freeze request…Tether normally complies with requests from US authorities, being in contact with them almost daily.”

Tether says freezing accounts completely without any verified instructions from authorities could be a reckless move that could disrupt ongoing investigations.

“In our dealings with law enforcement, we are occasionally made aware of addresses potentially linked to crime and we are specifically instructed not to freeze addresses without the explicit request of law enforcement, as this may alert suspects from law enforcement’s investigation, lead to liquidations or abandonment of funds, and jeopardize other connections that may have been made.

Circle, the USD (USDC) coin issuer, has already blacklisted Tornado Cash-related wallets, but Tether says other digital asset providers, including Binance USD (BUSD) issuer Paxos, have not yet frozen sanctioned addresses.

“We believe that, had it been taken without instructions from U.S. authorities, USDC’s decision to blacklist Tornado Cash smart contracts was premature and could have compromised the work of other regulators and enforcement agencies. law enforcement around the world.”

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