Tether temporarily froze approximately 1.45 million USDT across four THORChain vault addresses Friday, blacklisting the addresses without prior warning before unfreezing them hours later, according to Chad Barraford, technical co-founder of the cross-chain liquidity protocol.
Barraford said trading resumed roughly two hours after Tether reversed the action. "We don't know why this choice was made and have had no comms with USDT before this action and are actively reaching out to have a conversation," he said, expressing hope the incident was "made in error / misunderstanding."
The freeze exposes the centralized control embedded in USDT, even when deployed across decentralized protocols. Tether retains unilateral authority to blacklist addresses and render assets inaccessible—a direct counterparty risk for any user holding the stablecoin in THORChain vaults or elsewhere.
This is not an isolated incident. Conduit Technology filed a lawsuit against Tether earlier this week, alleging the company froze $2.76 million in USDT tied to a Brazilian authorities investigation launched in 2024. In August, two Thai nationals sued Tether, claiming it froze $42.4 million in USDT following an "informal request" from U.S. Homeland Security Investigations.
For THORChain, which depends on seamless cross-chain asset flows, unannounced freezes by a centralized stablecoin issuer undermine network stability and user confidence in asset accessibility. The lack of communication from Tether leaves the community without clarity on enforcement criteria or which addresses might face restrictions next.
