THORChain technical co-founder Chad Barraford reported Tether blacklisted the network's USDt vaults on Friday, freezing approximately $1.45 million USDT across four distinct wallets. The stablecoin issuer unfroze all four addresses hours later, allowing THORChain to resume normal trading operations.
Barraford said Tether provided no explanation for the initial action and had not communicated with the network before the freeze. He publicly expressed hope the decision was an "error or misunderstanding" and said he was seeking dialogue with Tether.
Tether's blacklist function, embedded in its smart contract, allows the issuer to unilaterally freeze specific on-chain addresses. When blacklisted, funds become untransferable. For THORChain, the temporary immobilization of $1.45 million directly reduced available capital for USDt trading pairs and swaps.
This incident follows a lawsuit filed earlier this week by cross-border payments platform Conduit Technology against Tether. Conduit alleged Tether froze $2.76 million worth of USDt in a wallet linked to a Brazilian authorities investigation initiated in 2024.
In August, two Thai nationals sued Tether, claiming the company froze $42.4 million in USDt after an "informal request" from U.S. Homeland Security Investigations.
The repeated freezes demonstrate Tether's active enforcement in response to legal and regulatory requests. For protocols like THORChain that depend on USDt liquidity, the incidents underscore exposure to issuer-level actions independent of on-chain mechanics.
