In response to requests from law authorities, Tether has only so far frozen USDT funds kept in personal wallets.
Tether appears to have frozen 46,360,701 USDT USDT ($46,274,472) owned by failing cryptocurrency exchange FTX in its Tron blockchain wallet, according to blockchain transaction data published by WhaleAlert on Nov. 10.
One day after the US Securities and Exchange Commission and US Justice Department started looking into FTX’s liquidity crisis, the action was taken. On October 11, a Tether spokeswoman said that the company “does not freeze wallets of exchanges or services” and that the company only freezes privately held wallets in response to a valid request from a confirmed law enforcement agent.
The wallet freeze enforced on FTX would be the first of its sort, if confirmed. The same day, after the exchange stopped accepting withdrawals, Japanese authorities ordered FTX to cease operations there. Update (Nov. 10, 3:45 pm UTC): A Tether spokesperson stated:
“While we cannot specifically comment, Tether routinely has an open dialogue with law enforcement agencies, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency and accountability.”
“Amid rumors of insolvency at crypto exchange FTX and worries about the financial conditions of Alameda Research, we would like to first and foremost, act as a mouthpiece for the entire crypto ecosystem and reiterate that one crisis does not make an industry.”
The representative reaffirmed that Tether has no debt to FTX or its associate trading firm, Alameda Research, in response to several unfounded allegations that it had USDT exposure to the struggling exchange. “Our reserves, which back Tether tokens 100%, are backed by assets that are more than liabilities. Tether holds a strong, conservative and liquid portfolio, which includes cash, cash equivalents and U.S. treasuries,” the source said, adding: “Tether will continue to focus on safeguarding those reserves.”