Tether has frozen at least 22 Ethereum accounts this year, with total USDT active balances of more than $5.5 million. The information was posted on Twitter by Eric Wall, CIO of Arcane Assets, and he added that 3 of the 22 frozen accounts had more than $994,000 worth USDT between them.
Eric further added that the most recent account to be frozen on June 14 was the largest freeze of the year, and was transferred from Binance, amounting to a total of $939,000. However, a Twitter user pointed out to another frozen account, which has an active USDT balance of over a whopping $4.5 million, and Eric agreed that he missed this one.
Overall, Eric said, the active USDT balance of the frozen accounts of all time is $46 million. Explaining the reason for account freezing, Eric said that most of the accounts were frozen either for precautionary measures, or were an error, or to protect others from making errors. The precautionary freeze was imposed on accounts that appeared to be linked to Ponzi schemes and scams.
Freezing of accounts raises questions on the basic ethos of cryptocurrencies. Stablecoins, in particular, have been heavily and extensively criticized for not being true to the crypto philosophy, and examples like these make the argument against them more substantial. Popular crypto influencer and Moneymail.ai founder, who goes by the usernames @lwsnbaker, posted his own tweet from 2018, in which he criticized stablecoins saying that USD backed stablecoins are not cryptocurrencies at all.