Stablecoin Issuer Tether 'Corporate Hold' On Not Freezing Tornado Cash Addresses - Here's Why
The issuer of the most widely used stablecoin said it did not freeze addresses associated with the sanctioned Tornado Cash crypto mixer.
Earlier this month, the Treasury Department's Office of Foreign Assets Control (OFAC) announced that it was banning Americans from using Tornado Cash, citing the service as a national security threat. In a new statement, the issuer of USDT Tether said that pending a direct request from the authorities, they will not ban transactions with addresses associated with Tornado Cash. .
Tether says that while it often responds to requests from law enforcement to freeze certain private wallets, it has not received recent notices of banning Tornado Cash addresses. was included on OFAC's Specially Designated Country and Blocked List (SDN).
“Tether has not been contacted by US officials or law enforcement agencies with requests to freeze addresses sanctioned by OFAC… Tether generally complies with requests from US authorities. Ky, almost daily contact with them.”
Tether says that completely freezing accounts without any verification instructions from the authorities could be a reckless move that could disrupt ongoing investigations .
“In our dealings with law enforcement, we are sometimes told of potentially criminally linked addresses and are specifically instructed not to freeze addresses that are not available. explicit request from law enforcement as this could alert suspects to a law enforcement investigation, cause liquidation or abandonment of funds, and jeopardize connections further could have been set. USD Coin (USDC) issuer Circle, has blacklisted wallets linked to Tornado Cash, but Tether says other digital asset providers, including developers Binance USD (BUSD) Paxos has yet to freeze sanctioned addresses. Blacklisting Tornado Cash is premature and could jeopardize the work of other regulators and law enforcement agencies around the world.”
Aug 25, 2022