The issuer of Tether (USDT), the world’s most popular and most used stablecoin, has defied the recent sanction placed by the U.S. Treasury on Tornado Cash, a cryptocurrency mixer that masks transactions between wallets.
Tether Defies Treasury Sanctions
Earlier this month, the United States Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash for facilitating the laundering of $7 billion worth of crypto since its creation in 2019.
On Wednesday, August 24, Tether announced that it will not freeze the smart contract addresses linked to the recently sanctioned Tornado Cash.
Freezing Tornado Cash Addresses Could Be Reckless
Tether explained that freezing the addresses could be a “highly disruptive” and “reckless” move. The stablecoin issuer believes that the move could alert suspects of an impending law enforcement investigation.
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In order to avoid abandonment of funds and jeopardize further evidence gathering, Tether has refrained from freezing smart contract addresses linked to the sanctioned crypto mixer.
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Tether writes that if the assets are frozen (like Circle did) without instructions from U.S. authorities, the move could jeopardize the work of other regulators and law enforcement agencies around the world.
On the Flipside
- Circle, the issuer of USD Coin (USDC) stablecoin, has blacklisted smart contract addresses linked to the sanctioned Tornado Cash.
Why You Should Care
Tether, a Hong Kong-based company, does not conduct its business in the United States, although it voluntarily follows certain U.S. regulations as a part of compliance.
Read the full details of the sanction below:
Tornado Cash Crypto Mixer Blacklisted By U.S. Treasury Department
Some investors say the sanction is for good. Read:
Kevin O’Leary Says Tornado Cash Sanction Is a Worthy Price to Pay for Institutional Adoption
