THORChain Co-Founder Accuses Tether of Freezing 1.45M USDT in Network Vaults Without Explanation
Key Takeaways
- •Tether blacklisted four THORChain vault addresses, freezing approximately 1.45 million USDT in network funds before unfreezing all of them about two hours later.
- •THORChain co-founder Chad Barraford said the protocol had no prior communication with Tether and hoped the action was the result of an error or misunderstanding.
- •Neither Tether nor THORChain has publicly explained why the addresses were blacklisted or why the restriction was lifted.
- •Because THORChain vaults pool user funds to settle cross-chain swaps, the issuer-level freeze briefly halted trading and affected customer assets.
- •Tether is facing separate lawsuits alleging freezes of $2.76 million and $42.4 million in USDt, while Cantor Fitzgerald's relationship with the issuer has drawn questions from a Senate Democrat.
Chad Barraford, technical co-founder of cross-chain liquidity protocol THORChain, has accused stablecoin issuer Tether of blacklisting the network’s USDt (USDT) vault addresses without explanation — before unfreezing them again several hours later.
In a Friday post on X, Barraford said Tether had blacklisted THORChain vault addresses, freezing a combined total of roughly 1.45 million USDT in network funds across four wallets. About two hours later, he reported in a follow-up post that trading would resume after the company unfroze all of the addresses.
“We don’t know why this choice was made and have had no comms with USDT before this action and are actively reaching out to have a conversation,” Barraford said before the addresses were unfrozen. “We hope that this was made in error / misunderstanding.”
Cointelegraph reached out to both Tether and THORChain for details on the incident but did not receive an immediate response. As of writing, neither the freeze nor its reversal had been publicly explained, and THORChain has said it is actively seeking a direct conversation with the issuer.
Tether issues USDT, the largest stablecoin by market capitalization, with tokens pegged to the US dollar. The USDT contract allows the issuer to blacklist addresses, a capability the company has exercised in the past, including in cooperation with law enforcement. Once an address is blacklisted, USDT held there can no longer be transferred. THORChain, for its part, is a decentralized cross-chain liquidity protocol that enables users to swap crypto assets between different blockchains. Because its vaults pool user funds to settle those swaps, an issuer-level freeze on vault addresses reaches pooled customer assets and can pause trading on the network, as it briefly did here — a reminder that decentralized platforms remain exposed to controls embedded in the stablecoins they hold.
The episode came during a week in which Tether’s address-freezing practices also surfaced in the courts. Earlier this week, cross-border payments platform Conduit Technology filed a lawsuit against Tether, alleging that the stablecoin company froze $2.76 million worth of USDt in a wallet tied to an investigation launched by Brazilian authorities in 2024.
In August, two Thai nationals also sued the stablecoin issuer, alleging that it froze $42.4 million in USDt after an alleged “informal request” from US Homeland Security Investigations.
Tether’s business ties have drawn political scrutiny as well: Cantor Fitzgerald, which maintains a well-documented relationship with the stablecoin issuer, has faced questions from a Senate Democrat over the connection.
