Tether is a famous USDT stablecoin issuer that has worked closely with regulators to flag down suspicious accounts. Recently, Tether revealed that it froze three Ethereum addresses.
Tether has frozen these addresses that held up to $160 million following a request from law enforcement. Therefore, the owners of those addresses won’t be able to move funds across. Tether did not disclose further details on the incident.
Tether has froze three Ethereum addresses holding over $160 million worth of USDT. 👁️
— Gold Telegraph ⚡ (@GoldTelegraph_) January 13, 2022
The Rise of Crypto Crimes
This is not the first time that a stablecoin issuer has blacklisted addresses and froze its funds. In total, Tether has frozen 563 ethereum addresses since 2017. In 2021 alone, it blacklisted about 312 addresses.
Reports state that 2021 was a profitable year for crypto fraudsters, as they made $7.7 billion from fraudulent activities. According to statistics, crypto fraud activity increased by 81% in 2021 compared to 2020. This surge is traceable to the advent of “rug pulls” like the Squid Game token scam.
Crypto transactions are anonymous, which makes them difficult to verify. However, there are methods like blacklisting and freezing funds to curb crime. This ensures that funds are not converted to fiat currency.
As a result, Tether has worked towards restricting the activities of crypto fraudsters. The company has achieved this by freezing funds in blacklisted addresses. A Tether spokesperson once said that “Through the freezing of addresses, Tether has been able to help recover funds stolen by hackers.”
More About Tether
Tether (USDT) is now one of the most popular stablecoin in the ecosystem. However, their centralized structure is a concern. In addition, the looming danger of stablecoin regulation is a huge threat. This has encouraged many protocols to boycott them in favor of decentralized options.
We appreciate the interest from lawmakers on the function, purpose, and security of all stablecoins across the cryptocurrency ecosystem. We have been and are pleased to work with policy makers around the world on these important issues. 1/3
— Tether (@Tether_to) November 25, 2021
However, there are concerns that centralized stablecoins might suffer a crisis. Such an event could see billions of funds wiped off completely. Therefore, the goal of the crypto-financial sector is to create a trustless, decentralized system. However, depending on a centralized issuer could jeopardize the vision.
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