Summary:
- Tether has stated that it will not freeze Tornado Cash linked addresses until instructed by US Authorities.
- The company explained that freezing addresses prematurely might interfere with investigations.
- Tether also pointed out that it does not operate in the United States but will comply with sanctions if requested.
The parent company of USDT, Tether, has released a statement explaining that it does not intend to freeze any Tornado Cash linked addresses until instructed by law enforcement.
US Treasury OFAC is Yet to Request Tether to Freeze Tornado Cash Addresses.
According to Tether, the US Treasury’s OFAC has yet to indicate that stablecoin issuers are expected to freeze addresses published on its Specially Designated Nationals and Blocked Persons (SDN) list. In addition, no US law enforcement agency or regulator has contacted Tether to request such actions despite the company being in constant contact with the same authorities.
Freezing Addresses Might Interfere With Investigations.
The Tether team added that completely freezing these addresses without explicit instructions from law enforcement could interfere with ongoing and sophisticated investigations. Tether said that according to its experience, authorities usually instruct them not to freeze addresses so they can make additional connections through the movement of funds.
Tether Does Not Operate From the United States.
Furthermore, the Tether team highlighted that it has no operations in the United States but would still comply with sanctions if requested. They said:
It is also worth mentioning that Tether is not a US person, does not operate in the United States or onboard US persons as customers. However, Tether does consider OFAC Sanctions as part of its world-class compliance program.
Circle’s Actions to Freeze Sanctioned Tornado Cash Addresses Were Premature
Concerning Circle’s decision to freeze sanction Tornado Cash addresses, the Tether team believed it was premature and could jeopardize the work of other regulators. They explained:
© Solana Daily Brief, Inc. All Rights Reserved. This article is for informational purposes only. It is not to be used as legal, tax, investment, financial, or other advice.We’d like to note that other digital asset providers, for example Paxos, a NY-regulated stablecoin that issues BUSD and USDp, and accounting for ~$20B of the total cryptocurrency market capitalization, haven’t frozen Tornado Cash wallets.
We believe that, if made without instructions from US authorities, the move by USDC to blacklist Tornado Cash smart contracts was premature and might have jeopardized the work of other regulators and law enforcement agencies around the world.