Title: Tether (USDT) Defies Treasury’s Sanction, Says Freezing Tornado Cash Addresses Is Reckless

Aug 25, 2022 08:02AM ET

By: AnalysisWatch

The issuer of Tether (USDT), the world's most popular and widely used stablecoin, has defied the recent sanction placed by the U.S. Treasury on Tornado Cash, a crypto-currency blender that masks transactions between wallets.

Earlier this month, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash for facilitating the laundering of $7 billion in crypto since its inception in 2019.

On Wednesday, August 24, Tether announced that it would not freeze smart contract addresses linked to the recently sanctioned Tornado Cash.

Tether explained that freezing the addresses could be a "highly disruptive" and "imprudent" move. The stablecoin issuer believes that this measure will alert suspects to the fact that a law enforcement investigation is underway.

In order to avoid the abandonment of funds and jeopardize the collection of additional evidence, Tether refrained from freezing the smart contract addresses linked to the sanctioned crypto shuffler.

Tether writes that if the assets are frozen (as Circle did) without instructions from U.S. authorities, the move could compromise the work of other regulators and law enforcement agencies around the world.

Tether, a Hong Kong-based company, does not conduct business in the U.S., although it voluntarily follows certain U.S. regulations as part of compliance.