In its Saturday, December 9 blog, Tether announced blocking 161 Ethereum wallets sanctioned by the United States Treasury from stablecoin USDT usage. The statement indicated that the new sanctions affected wallets that the United States’ Office of Foreign Asset Controls (OFAC) sanctioned.
Tether Blocks 150 Wallets with Nil Balances
The move by Tether affected 11 wallets with balances, leaving 150 holding no USDT. A notable discovery is a single wallet containing 97% of the 3.5M of USDT frozen. However, one wallet transacted hundreds of thousands of tokens 24 hours before Tether froze the wallets.
The company behind the issuance of the global leading stablecoin by market capitalization of $90.59 billion as per CoinMarketCap. It targets freezing its tokens in wallets belonging to the parties sanctioned by OFAC.
Tether’s announcement labeled the move as a voluntary initiative to avert misusing its tokens proactively. Besides, it targets enhancing security measures deployed to act upon the criminal actors and illicit financing.
A review of the blockchain data as per Etherscan indicates that the Tether freeze order affected 161 Ethereum wallets. While 150 wallets lacked balances, it remains uncertain if they ever held USDT tokens and the number.
ZachXBT Links $3.4M USDT Balance to Stable Exploit
A single address held $3.4 million of the total USDT tokens frozen by Tether. Blockchain investigator ZachXBT attributed the balance to the proceeds of the recent exploit of the Stake betting platform.
ZachXBT added that the wallet had been active shortly before the freeze, with hundreds of weekly transactions executed.
The blockchain sleuth indicated that of the remaining ten wallets, two held 20,000 USDT while a third held closer to 60,000. Other wallets had smaller balances, with one holding merely 16 cents.
The wallet with the cents balance had, in the past 24 hours, moved over 400,000 USDT traced from THORchain. However, the blockchain sleuth admitted encountering difficulties in tracing funds moved through a pair of other wallets.
Search for Wallets Sanctioned by OFAC Extends to Ethereum Layer 2 Networks
A detailed analysis of the possibility of the wallets containing USDT tokens extended to other chains, particularly the Ethereum Layer 2 networks.
The review of data aggregated by Polygonscan led to the discovery of two wallets that held USDT balances on the Polygon chain. The combined balance slightly exceeded 10,000 USDT.
The data analysis showed that another wallet held USDT balances on Ethereum’s mainnet. A similar search into Arbitrum and Optimism yielded no results for the sanctioned wallets’ list with USDT balances.
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