Tether Freezing and Reissuing USDT Tokens

I came across a story from a week ago that didn’t get the attention it deserves. Tether reported that it helped U.S. authorities combat terrorism financing by freezing and reissuing $1.6 million worth of USDT.

At first glance, nothing unusual - Tether freezes USDT all the time. I’ve written about this before, even pointing out which blockchain doesn’t allow Tether to freeze tokens at all.

But here’s the interesting part: this wasn’t just a freeze - it was also a reissuance. That’s something I hadn’t seen before. Tether froze the USDT held in certain wallets and created new tokens elsewhere, sending them to wallets that had no prior connection to the original funds.

Yes, you read that right. And no, these weren’t stolen funds being restored to a victim. The tokens were reissued simply because of how the original ones might have been used. The U.S. Department of Justice accuses the beneficiary of the frozen wallets of financing terrorist organizations.

What we don’t know - and what Tether doesn’t disclose - is who received the newly issued tokens or how they’ll be used.

Don’t be fooled: this kind of control has nothing to do with the principles of real crypto. On the contrary, in truly decentralized cryptocurrencies like Bitcoin, things like this simply can’t happen.

And if you’re looking to swap USDT to BTC at the best available rate - you can always do that on rabbit.io.