THORChain alleges Tether froze USDT vaults before restoring access

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THORChain Tether USDT freeze

Highlights

THORChain alleges Tether blacklisted and froze 1.45 million USDT in four vault addresses without explanation, disrupting trading for about two hours before restoration.
Tether currently faces multiple legal challenges, including Conduit Technology's lawsuit over a $2.76 million USDt freeze linked to a Brazilian investigation in 2024.
In August, two Thai nationals sued Tether, claiming the freeze of $42.4 million USDt followed an informal request from U.S. Homeland Security Investigations, fueling debate on centralized crypto asset control.

Vault freeze and trading disruption

As reported by Cointelegraph, Barraford says in a Friday post on X that Tether blacklists THORChain vault addresses without explanation, freezing a combined 1.45 million USDT held across four wallets.

He says roughly two hours later that trading resumes after the addresses are unfrozen. Before access is restored, Barraford says THORChain has no communication from Tether before the action and is actively seeking contact with the stablecoin issuer, adding that he hopes the freeze is the result of an error or misunderstanding.

Cointelegraph says it reaches out to both Tether and THORChain for comment but does not receive an immediate response.

Broader legal pressure on Tether

The episode comes as Tether faces separate legal challenges over other wallet freezes. Earlier this week, cross-border payments platform Conduit Technology files a lawsuit against Tether, alleging the company freezes 2.76 million dollars worth of USDt in a wallet linked to an investigation opened by Brazilian authorities in 2024.

In another case, two Thai nationals sue Tether in August, alleging the company freezes 42.4 million dollars in USDt after what they describe as an informal request from U.S. Homeland Security Investigations. Together, the disputes highlight continuing tension in the crypto sector over the power of centralized token issuers to block assets tied to compliance or investigative actions.

In our earlier article on the rapid growth of tokenized stocks, we explained how on-chain versions of U.S. equities are moving further into the crypto mainstream as demand rises for 24/7 trading access. We also noted that while these products can broaden access and settle on blockchain rails, they still carry meaningful investor risks, including volatility that mirrors the underlying shares and reliance on centralized intermediaries such as custodians and platforms.

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