Coindesk reported that Tether has just frozen $46 million USDT at the request of law enforcement. The reputable stablecoin has complied with the request, an inquiry that could be connected to the FTX exchange.
There is little information regarding the contents or purpose of the investigation; the information is only that it is taking place. A Tether executive told Coindesk, “We are starting to receive requests from LE to temporarily freeze assets while an investigation occur.”
Frozen Tether belongs to FTX
Coindesk added, “USDT tell 3% from its $1 peg earlier today as contagion begins to spread following FTX’s plight.” The report concluded that USDT is pegged slightly below $1.
News then surfaced that the frozen USDT belonged to one address, which was owned by FTX. Coming just days after the Binance saga, a pausing of withdrawals due to liquidity issues have rocked the platform.
The FTX fallout has continued to have ripple effects throughout the cryptocurrency community. Although the cryptocurrency investment platform was sought to be salvaged by a Binance acquisition, it will not occur. Binance also announced yesterday it is backing out of a deal it had struck just a day earlier.
The news of the acquisition, and its end, have been vitally important to the current state of the market. Conversely, it was followed by FTX’s halting of all withdrawals, a fact that did not quell fears of the platform’s current state following the failed acquisition.
It is unknowable if this investigation is related to FTX in some way, or if it is in some way a separate issue with Tether altogether. At this time, Tether has not released an official statement on its own behalf.