Funds linked to the recent Ledger exploit have been channeled into Tron's USDD stablecoin, according to on-chain records. The maneuver allowed thieves to circumvent Tether's ability to freeze the assets.
On-chain data shows a conversion of 2 million USDT through USDD's stability module. The decentralized swap converted Tether's centrally controlled stablecoin to USDD, which operates on Tron's network.
Bitquery, an on-chain data analytics firm, estimates Tether froze $10 million across addresses associated with the Ledger theft. The total amount stolen remains under investigation.
The conversion underscores a core challenge in DeFi asset recovery: once USDT is swapped for another stablecoin through a decentralized module, freeze mechanisms tied to Tether's protocol no longer apply. Tether maintains the ability to blacklist USDT at the contract level, but converted assets on alternative stablecoin rails escape that control. USDD is backed by a basket of cryptocurrencies and governed by the Tron DAO Reserve.
