Tether recently frozen over USDT 150 million. This isn’t the first time the company has frozen USDT, so this time the move raised concerns about centralization in the crypto community.
Follow Data Blockchain froze Tether in January of USDT worth $ 150 million. This isn’t the first time has frozen funds this way, and it is often a point of contention within the crypto community. At the same time, 3 addresses were blacklisted.
Blacklisted addresses | The source: Bloxy
No information was provided on why these funds were frozen. Thanks to the ability to encode smart contracts, Tether tokens can freeze, destroy or spend at will, as well as blacklist addresses.
Tether has done this so many times in the past, which has led a significant and vocal segment of the crypto community to push for the use of decentralized stablecoins like DAI. Currently, centralized stablecoins like USDT and USDC make up the bulk of the stablecoin market. However, some have pointed out that the large amount of DAI is covered by USDC and that there is also some risk involved in doing so.
But the most controversial aspect of Tether remains its support of care. With more than USDT 76 billion in circulation, investors have wondered what would happen if their reserves didn’t match that number. In December 2021, Tether minted 1 billion USDT on the TRON blockchain.
Tether says it has a wide variety of assets floating around, but investors and analysts want a reliable review. The network’s activities even caught the attention of the US Commodity Futures Trading Commission. Although the agency found no problem with the company, it fined it $ 41 million.
Tether’s controversial reputation will last until 2022
Tether has a long history of controversy and is most recently facing another lawsuit. Two New York investors sued the project, complaining that the project misled investors about their reserves.
Meanwhile, Tether tries to appease regulators. They announced in November 2021 that they would be working with lawmakers around the world to meet compliance standards. The company needs to make sure it doesn’t upset lawmakers and investors anymore as stablecoin regulation evolves in major economies.
Stablecoins have become a major concern of governments. They fear that this asset class could compromise the sovereignty of the local currency. Since USDT is the most popular stablecoin on the market, it could be a prime target for regulators.
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