Tether, the company behind the widely used stablecoin $USDT, has announced that they will not be freezing assets linked to tornado cash.
This comes after the United States’ Department of Treasure declared sanctions on Tornado Cash.
While it’s parent company, iFinex, is based in Hong Kong, Tether is the largest United States Dollar- backed stablecoin by market cap. As such, their stance on the sanction has a major role to play within the crypto ecosystem.
“So far, OFAC has not indicated that a stablecoin issuer is expected to freeze secondary market addresses“
OFAC, or the Office of Foreign Assets Control, is in charge of enforcing these sanctions. Since the sanction implementations, major centralized platforms like FTX have begun flagging accounts linked to mixers and privacy networks.
While Tether has maintained that “unilaterally freezing secondary market addresses could be a highly disruptive and reckless move“, they have done so in the past.
However, these were done under the order of law enforcement or government agencies.
Furthermore, such accounts were usually tied to illicit activities, including exploits or scams. When addresses like these are blacklisted, they will not be able to move the frozen funds.
Given that Tether has worked with US authorities in the past, it may be possible that they could eventually freeze addresses linked to Tornado Cash, should instructions be given.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chaindebrief