When speaking with law enforcement, “we are sometimes advised not to freeze addresses because this may tip off suspects,” Tether says.
Stablecoin issuers are not anticipated to immediately freeze secondary market addresses that are on OFAC’s SDN List or are run by sanctioned people or organisations, although OFAC has not officially declared this. Even though we deal with U.S. law enforcement on a daily basis and they tend to have quite precise requests, no U.S. law enforcement agency or regulator has ever made such a request.
Tether said that arbitrarily locking wallet or smart contract addresses might be “very disruptive” and “reckless.” “It might alert suspects to an approaching law enforcement investigation, prompt liquidations or abandonment of money, and impede the collection of more evidence,” the issuer said.
All U.S. people and businesses are forbidden from engaging with the USDC and Ethereum smart contract addresses of the digital currency mixer on the SDN list. Violators face severe criminal consequences. Tether, a Hong Kong-based issuer, does not accept U.S. citizens as clients and does not do business in the United States, but it voluntarily complies with some U.S. rules.
Tether has voiced issues with USD Coin issuer Circle’s unilateral move to freeze Tornado Cash smart contract addresses earlier this month. “If undertaken without orders from U.S. authorities, USDC’s decision to ban Tornado Cash smart contracts was premature and might have harmed the work of other regulators and law enforcement agencies throughout the globe,” Tether explains. The company notes that other U.S.-based stablecoin issuers, such as Paxos and Dai, did not freeze any Tornado Cash wallets. On August 8, the sanctions went into force.
Also Read: Ripple Continues Its Global Development With The Addition Of Tranglo To The UAE
Wallets