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ZEC $1,277 THORChain Exec Accuses Tether of Temporarily Freezing USDT Vaults
Tether blacklisted four of THORChain's TRON USDT vaults on Oct 9, freezing $1.45M in funds and disrupting trading for hours without prior notice.
Key takeaways
- 1.45M USDT Frozen. Tether temporarily froze about 1.45 million USDT across four THORChain TRON vaults on October 9.
- 27-Minute Halt Delay. THORChain's TRON trading and related activities halted roughly 27 minutes after the vault blocklist was applied.
- $363K Payouts Queued. About $363,000 in user payouts were queued during the hours-long freeze of the vault addresses.
What happened
On October 9, THORChain technical co-founder Chad Barraford accused stablecoin issuer Tether of blacklisting four of the protocol's TRON USDT vaults without prior notice or explanation. The blocklist froze a combined 1.45 million USDT held in the affected addresses, per Barraford and on-chain researcher Khal.
The freeze halted TRON trading, transaction signing and liquidity provider activity on the cross-chain protocol roughly 27 minutes after the blocklist was applied, queuing approximately $363,000 in pending payouts. Barraford reported the vault addresses appeared unfrozen around 15:35 UTC the same day, and trading was expected to resume shortly after.
Barraford stated THORChain received no communication from Tether before the action and was unaware of the reason for the freeze. Cointelegraph reached out to both Tether and THORChain for comment on the incident but did not receive an immediate response.
Why it matters
The incident highlights a key operational risk for cross-chain protocols that hold large amounts of centralized stablecoins. Even though THORChain uses distributed validator controls to manage its vaults, Tether retains the ability to freeze or restrict USDT transfers at the address level, independent of the protocol's internal safety measures.
Background
- The freeze comes amid increased scrutiny of THORChain's anti-illicit flow controls, following a September trading surge linked to Bitget hack activity, and aligns with Tether's stated policy of freezing addresses tied to OFAC sanctions.
What is still unclear
- Tether has not provided any public explanation for why it blacklisted the THORChain vault addresses or why it reversed the restrictions hours later.
Questions readers ask
Why did Tether freeze THORChain's USDT vaults?
Tether has not publicly stated the reason for the October 9 blacklist of four THORChain TRON vaults. THORChain co-founder Chad Barraford said the protocol received no prior communication about the action.
How much USDT was frozen in the THORChain vaults?
Approximately 1.45 million USDT was frozen across the four affected THORChain TRON vaults during the October 9 incident.
When were the THORChain USDT vaults unfrozen?
The vault addresses appeared unfrozen around 15:35 UTC on October 9, according to THORChain technical co-founder Chad Barraford. Tether did not publish an explanation for the reversal of the blocklist.
