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Tether blacklisted four THORChain USDT vaults on the TRON blockchain on October 9, freezing 1.45 million USDT. The addresses were removed from the blacklist hours later with balances intact.
On October 9, Tether, the issuer of the stablecoin USDT, blacklisted four of THORChain’s USDT vaults on the TRON blockchain. The action froze approximately 1.45 million USDT and halted TRON swaps on the decentralized exchange. The addresses were removed from the blacklist hours later, leaving the balances untouched.
The blacklist was executed through the addBlackList function in Tether’s TRC-20 contract on TRON. This prevented the affected vaults from sending USDT. In response, THORChain suspended TRON trading, transaction signing, and liquidity-provider actions.
Sources differ on the exact duration of the freeze. BlockchainReporter states the addresses came off the blacklist "about three hours later," while Cointelegraph reports that Barraford noted trading would resume "about two hours later." In both accounts, the protocol restored TRON swaps after the reversal.
THORChain technical co-founder Chad Barraford stated that the protocol received no communication from Tether before the action. "We don’t know why this choice was made and have had no comms with USDT before this action and are actively reaching out to have a conversation," Barraford wrote on X. He added that the team hoped the move "was made in error / misunderstanding."
BlockchainReporter attributes a separate statement to Barraford calling the move "unprecedented in our industry," though Cointelegraph does not include this specific quote in its report.
This incident highlights the tension between decentralized protocols and centralized stablecoin issuers. While THORChain is designed to remove intermediaries, its reliance on USDT means its operations can be affected by Tether’s contract-level controls. Tether has previously blacklisted wallets tied to sanctions cases, including those linked to ISIS-K.
The freeze occurred amid a broader investigation into hardware-wallet thefts involving compromised Ledger devices sold by reseller CryptoBilis. BlockchainReporter notes that the THORChain vaults appeared to be part of a batch of freezes applied to multiple wallets, though no confirmed connection has been established.
Tether has not publicly explained the initial blacklist or its reversal. Cointelegraph reported that it reached out to Tether and THORChain for details but did not receive an immediate response.
The event underscores the operational risks decentralized finance (DeFi) protocols face when relying on stablecoins controlled by single issuers. Even protocols built on permissionless architecture can be paused on major routes without notice if the underlying asset issuer exercises its freeze authority. This incident follows other legal challenges against Tether, including a lawsuit filed by Conduit Technology alleging the freezing of $2.76 million in USDT, and a separate suit by two Thai nationals alleging the freezing of $42.4 million.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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