Tether (USDT), the company that issues U.S. dollar stablecoins, announced on Wednesday that it would not freeze cryptocurrency trail-mixer Tornado Cash smart contract addresses sanctioned by the Specially Designated Nationals and Blocked Persons (SDN) list maintained by the United States Office of Foreign Assets Control (OFAC Control).
Tether noted that it might be a “very disruptive” and “reckless” action to unilaterally freeze wallet or smart contract addresses. “It could alert suspects of an impending law enforcement investigation, cause liquidations or abandonment of funds and jeopardize further evidence gathering,” the issuer said.
It is against the law for any individual or organisation in the United States to communicate with the USDC and Ethereum smart contract addresses listed on the SDN list of the digital currency mixer.
Violators will be subject to severe criminal penalties. Tether, on the other hand, is an issuer located in Hong Kong and does not accept clients who are citizens of the United States nor does it do business in that country. Tether does, however, voluntarily comply with some restrictions that are in place in the United States.
Tether has highlighted concerns with the action made earlier this month by USD Coin issuer Circle to arbitrarily freeze Tornado Cash smart contract addresses. “If made without instructions from U.S. authorities, the move by USDC to blacklist Tornado Cash smart contracts was premature and could have jeopardised the work of other regulators and law enforcement agencies around the world,” says Tether.