Tether, the company behind the largest stablecoin in the crypto market, has announced that it has frozen $2.5 million worth of USDT tokens from multichain. The move comes after a request from law enforcement agencies, who are investigating a case of fraud involving the tokens.
According to a tweet from Tether, the freeze affects 2.5 million USDT tokens that were issued on the Ethereum, Tron, Binance Smart Chain and Polygon networks. The company did not disclose the details of the fraud case but said that it is cooperating with the authorities to prevent further illicit activity.
Tether is known for its ability to issue USDT tokens on multiple blockchains, which allows users to transfer value across different platforms without friction. However, this also exposes the tokens to various security risks, such as hacks, thefts and scams.
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Tether has faced several controversies in the past, such as allegations of insufficient backing, manipulation of the crypto market and lack of transparency. The company has repeatedly denied these claims and said that it is fully compliant with all regulations and audits.
Tether’s freeze of
Tether, the issuer of the largest stablecoin USDT, has announced that it has frozen $2.5 million worth of tokens from multichain, a decentralized exchange platform that supports multiple blockchains. The freeze was requested by multichain after it detected a security breach that compromised some of its wallets.
According to a blog post by multichain, the hacker managed to exploit a vulnerability in its smart contract code and stole over $8 million worth of various tokens, including USDT, ETH, BNB, and MATIC. The hacker then tried to swap the stolen tokens for other assets on different platforms, such as Uniswap, PancakeSwap, and QuickSwap.
Multichain said that it contacted Tether and other projects to help recover the funds and prevent further losses. Tether confirmed that it received the request from multichain and decided to freeze $2.5 million worth of USDT on the Ethereum, Binance Smart Chain, and Polygon networks.
Tether said that it is working with multichain and law enforcement agencies to track down the hacker and assist in the investigation. Tether also stated that it has the ability to freeze and blacklist addresses that hold its tokens in case of emergency situations, such as hacks, thefts, or court orders.
Tether’s freezing power has been controversial in the past, as some critics argue that it undermines the decentralization and censorship-resistance of cryptocurrencies. However, Tether claims that it only uses this power in rare and extreme cases, and that it is necessary to protect its users and the ecosystem from malicious actors.