Tether Freezes 22M USDT on Garantex Exchange

Tether has frozen approximately 22 million USDT held on addresses belonging to the Garantex exchange. As a result, the exchange was forced to completely halt operations.

While Garantex wasn't a particularly large exchange, it still had customers, and many of the tokens in the frozen addresses belonged to them.

Tether has long been freezing tokens on addresses it considers "dirty." However, I've never before heard of them freezing an address belonging to a centralized exchange that holds tokens on behalf of others. Tether must have known that this freeze would cause significant harm - not so much to the exchange owners, but to its customers. Yet this didn't stop them.

👉 What can you do?

1. Use bridged USDT on blockchains where USDT smart contracts don’t have freezing functions (Polygon, BNB Chain, etc.). However, if criminals send USDT to a bridge address that issues bridged tokens on one of these blockchains, what would prevent Tether from freezing the entire bridge and effectively "nullifying" the backing for all bridged tokens at once? This incident makes me believe that nothing would.
2. If you specifically need USDT, consider using the Liquid blockchain, where Tether lacks the technical ability to freeze tokens. Despite its name, USDT on this blockchain isn’t as liquid as on others - few accept it. However, at rabbit.io, you can always exchange it for any other cryptocurrency.
3. The most reliable approach is to completely abandon stablecoins that allow issuers to freeze tokens at will. Tomorrow, the same thing could happen not just to an exchange or bridge but also to an AMM pool where you provide liquidity to earn passive income. After all, "dirty" tokens can end up in these pools too!

There are many alternatives to Tether-backed stablecoins. Choose one that suits you, and welcome to rabbit.io: with us, you can easily exchange USDT for any of them - and much more.