Few realise how easy it is for Tether to freeze and burn USDT
Many cryptocurrency users are surprised to learn that USDT is not the same as Bitcoin or Ethereum. Although it exists on public blockchains, USDT is issued by a private company. And this private company has full control over the tokens it creates.
One of the questions we are frequently asked is whether Tether can actually burn USDT belonging to a user.
The short answer is: yes.
Technically, Tether has the ability to freeze tokens associated with particular wallet addresses. Freezing already resembles a confiscation, as the rightful owner of the USDT can not use them. In certain circumstances, frozen tokens may later be even removed from circulation (“burned”) as part of Tether’s internal procedures.
Frozen or burned, the result is basically the same – confiscation
For the wallet owner, the practical consequences can be severe. A frozen balance cannot be transferred or used. And once tokens have been burned, recovering their value may become considerably more difficult.
Don’t wait and take immediate legal action if your USDT are frozen (or burned)
This is why time is often critical. Waiting for the issue to resolve itself without understanding the reason for the freeze may significantly reduce the available legal options.
The appropriate legal strategy depends on the specific circumstances of each case. The most important things to consider are the origin of the funds and the authority that requested the freeze (if any). In many cases it is important to have the documentation available to support the legitimacy of the transactions.
If you would like to understand how USDT freezes and burns work, what legal issues arise, and what steps may be available to affected owners, you can read a detailed analysis in the article Tether burned my USDT, now what?