Tether, the company that issues USDT and EURT stablecoins, has informed that it will not freeze any addresses linked to Tornado Cash, until the relevant authorities expressly request it.
Tether will not freeze addresses linked to Tornado Cash for the time being
While the Tornado Cash case has raised many questions about potential decentralization gaps in the crypto ecosystem, Tether has been keen to clarify its position.
The issuer of the popular stablecoin USDT said that it will not freeze any addresses that have interacted with the mixer unless ordered to do so by U.S. authorities. The company says it is communicating closely with regulators, and at the moment the Office of Foreign Assets Control (OFAC) has not yet given any indication that it will do so:
“Moreover, no law enforcement agency or regulator […] has made such a request despite our almost daily contact with U.S. law enforcement, whose requests always provide specific details.”
Obviously, these words mean that conversely, Tether will conduct freezes if forced to do so.
Overzealousness from various blockchain players?
In its press release, Tether implies that some players in the ecosystem may have overreacted:
“We believe that if taken without instructions from U.S. authorities, the USDC’s decision to freeze Tornado Cash’s smart contracts is premature, and could compromise the work of other regulators […] around the world.”
In addition, Tether points out that other competing stablecoin issuers are camped on the same position as the company. Indeed, Paxos, which is in charge of USDP or BUSD, as well as MakerDAO and its DAI, have not resorted to any freezes.
On the other hand, the company goes back to the fact that it should not be considered as a US company. Consequently, the laws of the United States do not concern it as long as it does not operate on this soil. However, it recalls that in a concern of “world-class compliance”, Tether has taken note of these sanctions.
In sum, we can see that according to its words, Tether will not do more than what it is legally required to do vis-à-vis Tornado Cash. This seems to be in contrast to what has been undertaken by several crypto projects recently.