There is a buzz about a large-scale movement related to the Tether incident. According to on-chain data from Whale Alert, in January, Tether collectively froze over $182 million USDT across five wallet addresses on the Tron blockchain. Each wallet reportedly held between approximately $12 million and $50 million USDT.

These freezes were executed on the same day, which suggests that it was not mere coincidence but a clearly planned action. Tether formalized a policy in the second half of 2023 to comply with the sanctions framework of the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), and this Tether incident appears to be part of that effort. Tether has the authority, based on its terms of service, to freeze any address upon request from authorities.

USDT is the world’s largest stablecoin, with a circulation of about $18.97 billion. Because it is issued and managed centrally, Tether can prevent transfers or redemptions by blacklisting addresses without directly seizing assets. The frozen USDT remains visible on the blockchain but becomes essentially unusable. Such large-scale freezes, like in the Tether incident, once again demonstrate the strong influence that centralized authorities hold over the stablecoin market.