Tether gives THORChain the cold shoulder, unfreezes $1.45M USDT two hours later 🤷

A top executive at cross-chain liquidity network THORChain accused stablecoin issuer Tether of blacklisting the network's USDt (USDT) vault addresses without warning, briefly freezing about 1.45 million USDT held across four wallets before lifting the restrictions roughly two hours later.

Technical co-founder Chad Barraford detailed the episode in a Friday X post, writing that Tether had blacklisted the vault addresses and that THORChain had received no prior communication from the company. "We don't know why this choice was made and have had no comms with USDT before this action and are actively reaching out to have a conversation," Barraford wrote. He added, "We hope that this was made in error / misunderstanding." About two hours later, he reported that trading had resumed after the addresses were unfrozen.

The brief freeze adds to a series of legal and regulatory disputes involving Tether's ability to block funds at the wallet level. Earlier this week, cross-border payments platform Conduit Technology filed a lawsuit against the company, alleging that Tether froze $2.76 million worth of USDt held in a wallet tied to an investigation launched by Brazilian authorities in 2024. In August, two Thai nationals also sued Tether over an alleged freeze of $42.4 million in USDt following what the plaintiffs described as an "informal request" from U.S. Homeland Security Investigations.

Cointelegraph reported that it reached out to both Tether and THORChain for comment on the THORChain incident but did not receive an immediate response. Tether's compliance team has the authority under its terms of service to blacklist addresses, a power it has previously used in cooperation with law enforcement agencies.

The episode comes as Cantor Fitzgerald, a financial services firm with longstanding ties to Tether, faces questions from a U.S. Senate Democrat over those connections. Tether has not publicly addressed the THORChain freeze or the lawmakers' inquiry. Barraford said THORChain was "actively reaching out" to initiate a conversation with the stablecoin issuer as of Friday evening.