Tether, the owner and operator of the largest stablecoin network in the world, has blacklisted three Ethereum addresses on Thursday, and effectively froze $150 million in USDT split among them.
Key takeaways:
- According to blockchain explorer Bloxy, Tether froze the funds simultaneously at around 4:30 PM UTC on January 13. While 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.
- The addition of three new addresses to the blacklist marks the first time that Tether has done so this year. In the four and a half years since the blacklist was first 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 exercise its power and control USDT funds at its own discretion. This goes against the fundamental principle of crypto and has sparked many debates in the crypto community over the years, with many members believing Tether holds too much power.
- While USDT is still the biggest stablecoin, with a market capitalization of $78 billion, competitors are quickly catching up. USD Coin, for instance, has experienced exponential growth over the past couple of months and currently commands a $45 billion valuation.
- Algorithmic stablecoins, most notably Terra’s UST, are also on the rise. UST is pegged to the value of the US dollar via a complex mechanism of smart contracts and is entirely decentralized. Following the news of a new batch of blacklistings, the founder of Terra Do Kwon tweeted that “there is no blacklisting key for $UST,” subtly implying his disagreement with Tether’s actions.
