THE DAILY ENCRYPT

October 4, 2022

Government Needs to Tell us to Freeze Tornado Cash Addresses – States Tether

Tether released a statement stating that it had not frozen sanctioned wallet addresses linked to Tornado Cash....
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Tether released a statement stating that it had not frozen sanctioned wallet addresses linked to Tornado Cash. Tether stated that neither US regulators nor law enforcement have asked it to freeze secondary market addresses associated with the cryptocurrency mixer.

Tether released the statement in response to a Washington Post article that stated that Tether may be violating Treasury Department rules.

Tether has said that it will not freeze any sanctioned wallet addresses linked to Tornado Cash, as it has not been asked by US regulators or lawmakers to do so.

On August 8, the US Treasury Department’s Office of Foreign Assets Control sanctioned Tornado Cash, a cryptocurrency mixer. It claimed that criminals had used Tornado Cash to launder more \$7 billion in virtual currency.

“So far, OFAC have not indicated that stablecoin issuesrs are expected to freeze secondary markets addresses that are published ON OFAC’s SDN List, or that are operated and controlled by persons or entities that have been sanctioned BY OFAC,” Tether stated in a statement.

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This appears to be in response to a Washington Post article which said that the company was “possibly in violation” the new Treasury Department sanctions against Tornado Cash.

 Tether stated that no US regulator or law enforcement agency has requested such a request, despite their close contact with US authorities, whose requests always include precise information.

The Treasury Department lists several approved wallet addresses for ether and the Centre’s dollar pegged stablecoin USD Coin. Although Tether’s US dollar pegged stablecoin USDT is not listed by name, it can interact with addresses that use the ERC-20 token standard. This Tornado Cash router address received a USDT payment a few days after the Treasury sanctions.

Tether stated that it works closely with US law enforcement and will freeze private wallets when it receives valid requests from authorities. It stated that it has not been asked by the US government to freeze the wallets sanctioned with Tornado Cash ties.

The company stated that Tether usually complies with US authorities’ requests, and is in close contact almost daily. “For example, we have been cooperating with US law enforcement on various freezes, including the two weeks following the OFAC public disclosure regarding Tornado Cash. No specific request was made to us about freezing Tornado Cash addresses.

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Tether also stated that unilaterally freezing secondary market addresses could prove to be dangerous and disruptive. It stated that even if Tether suspects suspicious activity at an address, it could still complete a freeze without the verification of law enforcement or other government agencies. This might hinder ongoing sophisticated law enforcement investigations.

The wider crypto industry is seeking clarification on the actions it must take in order to comply with Treasury Department sanctions. Rep. Tom Emmer (R-Minn.), sent a letterto Treasury Secretary Janet Yellen earlier this week. He wanted to know how the department intends to enforce the sanctions that focus on computer code and not specific individuals or businesses.

Elena Argyros

Elena Argyros

Elena is cryptocurrency writer / journalist based in Europe. She has extensive knowledge in the crypto space and is a solidity programmer by trade. Elena has built an extensive resume working with some of the most ground breaking blockchain firms. Being in Europe, Elena has amassed a large network of professionals in the space and states "The technology behind blockchain is going to impact everyone on earth in a good way, once you get to understand it".
Elena Argyros

Elena Argyros

Elena is cryptocurrency writer / journalist based in Europe. She has extensive knowledge in the crypto space and is a solidity programmer by trade. Elena has built an extensive resume working with some of the most ground breaking blockchain firms. Being in Europe, Elena has amassed a large network of professionals in the space and states "The technology behind blockchain is going to impact everyone on earth in a good way, once you get to understand it".

© 2022 The Daily Encrypt. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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