While the crypto community is still talking about the U.S. government banning the ethereum mixing platform Tornado Cash, the stablecoin issuer Tether Holdings Limited revealed on Wednesday that the company would not “freeze Tornado Cash addresses.” Tether’s recently published blog post about the subject says the company is waiting for instructions from law enforcement.
Tether has no plans to freeze Tornado Cash-associated private wallets and is waiting to hear from law enforcement officials
On August 8, the US Treasury Department’s financial watchdog, the Office of Foreign Asset Control (OFAC), banned Ethereum mixing application Tornado Cash, and since then, OFAC’s sanctions have been met with enforcement disputes. Of course, OFAC’s actions had a ripple effect and several companies such as Circle Financial and Coinbase’s Center Consortium, Github and Discord followed suit. For example, the developers were Suspended From Github, the Tornado Cash Discord server was removed, and reports noted That center blacklisted dozens of Ethereum addresses and Freeze to 75,000 USDC,
According to a blog post published by Tether Holdings Limited published 16 days after OFAC’s ban, the company explains that as of right now, it’s not freezing USDT assets held within the Tornado Cash mixer. Tether says the company works with law enforcement officials regularly and is in daily contact with “key law enforcement officers.” If a law enforcement official provides a legitimate request to freeze a private wallet, Tether “complies with the freeze,” but we do not freeze wallets of exchanges/services,” the company added.
Tether’s blog post continues:
So far, OFAC has not indicated whether a stablecoin issuer is expected to freeze secondary market addresses that are published on OFAC’s SDN list or those operated by OFAC-approved individuals and entities. Furthermore, no US law enforcement agency or regulator has made such a request, despite our nearly daily contact with US law enforcement whose requests always provide accurate details.
Unilaterally Freezing Addresses Prematurely Could Be a Bad Move, Tether Says
Furthermore, Tether says that choosing to unilaterally freeze secondary market addresses very well “could be a highly disruptive and reckless move.” The company also detailed that there have been instances where law enforcement has told the company not to freeze suspected private wallets so the suspects of an investigation are not alerted and liquidate the funds. Tether’s blog post also calls out a number of stablecoin issuers like Paxos, a New York-based regulated company.
Tether said that Paxos did not freeze the Tornado Cash wallet and the issuer of USDT further noted that MakerDAO, the issuer of decentralized finance (DeFi) stablecoin DAI, did not proceed with any sort of freeze. However, Tether seems to disagree with the move by USDC issuers. “We believe that, if done without instructions from US authorities, USDC’s move to blacklist Tornado Cash smart contracts was premature and could jeopardize the work of other regulators and law enforcement agencies around the world. was,” the blog post added on Wednesday.
