Tether temporarily blacklisted four THORChain vault addresses on Friday, freezing approximately 1.45 million USDT held by the cross-chain liquidity network. Chad Barraford, technical co-founder of THORChain, reported the action before confirming the addresses were unfrozen hours later.
Barraford said Tether provided no explanation for either the blacklisting or the unfreezing. "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," Barraford said. "We hope that this was made in error or misunderstanding."
For THORChain, which facilitates native asset swaps across blockchains, the freeze disrupted on-chain liquidity operations. The network depends on predictable asset availability in its vault structure, and sudden blacklisting undermines that operational foundation.
The incident underscores the centralized control stablecoin issuers maintain over their assets, even when integrated into decentralized protocols. While Tether operates under compliance requirements, unilateral freezes of significant reserves held by DeFi protocols raise questions about the censorship-resistance guarantees these platforms provide to users.
This is not Tether's first freeze. Cross-border payments platform Conduit Technology filed a lawsuit against Tether this week, alleging the company froze $2.76 million in USDT in a wallet connected to a Brazilian authority investigation begun 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.
