An Ethereum address that held approximately $31.8 million in USDT was frozen by stablecoin issuer Tether on November 8th.
This wallet freeze once again reveals a defining feature of USDT’s functionality. That’s the power of Tether. We will suspend the use of funds if we deem it appropriate.
As CriptoNoticias has repeatedly pointed out, this power raises questions about the true autonomy of the currency.
In fact, if companies can block the movement of funds at any time; Its behavior is similar to central bank digital currencies (CBDC).
These state digital currencies allow governments to Decide on rules for usage. For example, they can block transactions, restrict operations, and directly supervise users’ money.
Why is Tether freezing addresses in USDT?
Tether did not provide an official explanation for freezing approximately 32 million USDT on November 8, but the company’s website states that the action was Comply with cooperation protocols with global institutions:
From time to time, Tether receives requests for information about its customers from security agencies around the world. (…) When contacting Tether, authorities are typically interested in two types of data: information about the client’s identity and information about the client’s activities using Tether tokens. Additionally, authorities may request that your address be frozen as part of their investigation.
Tether official website.
In other words, if you block that wallet, Formal requests from law enforcement or regulatory authorities It will investigate serious crimes (money laundering, terrorism, fraud, hacking).
Because tethers can operate on specific addresses, Control keys that manage smart contract issuance and executiona computer program that defines how tokens work on different networks.
The November 8th episode will strengthen the discussion about the role stablecoins play within the ecosystem. They provide functional parity with the dollar and facilitate rapid operations, but also replicate the typical control mechanisms of traditional currencies.