Tether is still supporting wallet addresses related to Tornado Cash as it has not received any requests from US regulators, the company said.
In a report of Washington Post on August 24, this newspaper claimed Tether may have failed to comply with US Treasury Department’s sanctions against Tornado Cash. The article also cited data from crypto intelligence firm Dune Analytics that proves Tether has not blacklisted any accounts associated with Tornado Cash.
In response, Tether Chief Technology Officer Paolo Ardoino said: “So far, OFAC has not indicated that a stablecoin issuer is expected to freeze secondary market addresses that are published on OFAC’s SDN List or that are operated by persons and entities that have been sanctioned by OFAC. Further, no US law enforcement agency or regulator has made such a request despite our near daily contact with US law enforcement whose requests always provide precise details.”
He pledged that Tether normally complies with requests from US authorities and considers US Treasury sanctions as a part of its world-class compliance program. Tether will work closely with US law enforcement and freeze wallets if it receives a legitimate request from the authorities, the Tether representative added.
Tether explained that freezing addresses related to Tornado Cash could be highly disruptive and reckless. Even if Tether finds suspicious activities on such an address, freezing without official guidance from law enforcement and government agencies could lead to other legal investigations.
On the other hand, Circle – the issuer of the USDC stablecoin – blacklisted Tornado Cash wallet addresses within hours of the sanctions. Tether commented that Circle’s move was hasty and may jeopardize other regulators and law enforcement agencies around the world. Tether further noted that Paxos, the organization behind stablecoins BUSD and USDP, and algorithmic stablecoin DAI – with 36% of reserves in USDC – also did not block Tornado Cash addresses.
Tornado Cash’s TORN surged more than 30% after Tether confirmed it would not block transactions from addresses related to the crypto mixer.
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