Tether blacklisted four THORChain network vault addresses Friday, freezing approximately 1.45 million USDt across the addresses. The funds remained inaccessible for hours before Tether unblocked them.
THORChain technical co-founder Chad Barraford said Tether provided no explanation for the action and that THORChain had no prior communication with Tether before the freeze. Barraford expressed hope the incident was "made in error / misunderstanding."
The freeze highlights the centralized control Tether maintains over USDt, allowing the company to render specific on-chain addresses immutable. This capacity enables Tether to comply with regulatory or law enforcement requests.
The incident is not isolated. Earlier this week, cross-border payments platform Conduit Technology filed a lawsuit against Tether over a separate freeze of $2.76 million in USDt, reportedly linked to a 2024 investigation by Brazilian authorities.
In August, two Thai nationals initiated legal action against Tether, claiming the company froze $42.4 million in USDt following an alleged "informal request" from US Homeland Security Investigations.
In both the Conduit and Thai cases, as with THORChain, Tether did not publicly explain its freezing actions.
The temporary disruption underscores the counterparty risk DeFi protocols face when integrating centralized stablecoins. The ability to freeze significant liquidity without notice or disclosure introduces operational uncertainty for decentralized applications relying on USDt liquidity pools and cross-chain bridges.
