Tether (USDT), the company behind the largest stablecoin in the cryptocurrency market, announced that they could freeze Tornado Cash addresses if requested by law enforcement. However, until today, they haven’t done so in order to avoid alerting the suspects about possible investigations. This shows that despite the “decentralized” nature of the crypto market, most projects are still centralised and controlled by some entities.
Tether Could Freeze Addresses
In a recent blog post, Tether informed that it is closely working with law enforcement agencies around the world to help with different investigations. One of the ways in which Tether could help is by freezing users’ assets in case there is a specific request to do so. At the same time, Tether informed that they are very fast when confirming requests from law enforcement agencies.
The blog post published a few hours ago reads as follows:
“We are in almost daily contact with key law enforcement officers and pride ourselves on the timeliness with which we respond to their requests. When Tether receives an applicable/legitimate request from a verified law enforcement agent to freeze a privately held wallet, the Company complies with the freeze (we do not freeze wallets of exchanges/services).”
At the same time, when it comes to Tornado Cash addresses that have been blacklisted by OFAC, no U.S. law enforcement agency has requested Tether to freeze any of these accounts. This is despite the fact that Tether has regular contact with regulators.
Furthermore, Tether has also informed that they do not freeze assets unless it’s requested by law enforcement agencies. Doing so beforehand could create issues with investigations and alert wallet owners (suspects) of the law enforcement investigation.
The cryptocurrency market has also other large stablecoin providers, including Binance USD (BUSD), Paxos (PAX), and USD Coin (USDC). However, there have been no freezings as of today. Therefore, law enforcement agencies continue to investigate this specific situation related to Tornado Cash.
Privacy and Decentralization in the Cryptocurrency Market
Despite the cryptocurrency space being defined as a decentralized market, it is clearly far from this. As we can see from Tether’s blog post, the company has full control over addresses (they can freeze them if requested by law enforcement agencies).
This is something that does not happen with Bitcoin. Indeed, it is worth pointing out that Bitcoin might have higher volatility and that its price fluctuates on a daily basis. Nevertheless, it is the most secure and decentralized virtual currency in the world.
Those users interested in decentralization should search for alternatives to Tether and centralized digital assets. Bitcoin is, by far, the digital asset that offers users the highest levels of decentralization, which is a very positive thing. At the same time, it might also be necessary for some users the creation of a really decentralized stablecoin. Let’s not forget that some stablecoins are used in countries with oppressive governments in order to avoid extremely high inflation rates or currency controls.