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Crypto Decentralization Myth Busted: ETH And USDT Freezes Unveil A Shocking Truth
TL;DR
Crypto pundit Star has revealed that decentralization in crypto is a myth, citing Tether's recent freeze of $344 million USDT. This action, coordinated with U.S. authorities, highlights the centralization within crypto networks and firms.
Key points
- Star claims crypto decentralization is a myth
- Tether froze $344 million USDT with U.S. law enforcement
- Tether has admin control over USDT contracts
- Arbitrum froze assets stolen by Kelp DAO exploiter
- Centralization exists within crypto networks and firms
Mentioned in this story
TetherArbitrumTRON
Kelp DAO
Crypto pundit Star has highlighted that crypto decentralization is a myth, noting that crypto networks and firms can freeze funds. The pundit specifically alluded to the Tether freeze and Arbitrum’s move to freeze the crypto assets stolen by the Kelp DAO exploiter.
Pundit Highlights Crypto Decentralization Myth
In an X post, Star stated that centralization has been exposed inside TRON USDT. The pundit noted that Tether just executed the largest freeze in its history, freezing $344 million USDT, which it carried out in coordination with OFAC and the U.S. law enforcement. This was executed directly through the USDT smart contract, with the funds visible but completely unusable.
Further commenting on how it works, Star explained that Tether has admin control over USDT contracts, which proves that crypto decentralization is a myth. The pundit added that this admin control enables the USDT issuer to blacklist any address, freeze balances instantly, and permanently destroy funds.
It is worth noting that Tether had confirmed the freeze, stating that it supported the U.S. government in freezing $344 million USDT across two addresses, which were on the TRON network. The firm added that the freeze was executed after the addresses were identified, preventing further movement of funds.
A CNN report confirmed that the U.S. government directed the freeze of these USDT funds because they are linked to Iran. Iran had notably opted against stablecoins in favor of Bitcoin for toll payments at the Strait of Hormuz over fears of seizure, further highlighting the myth around crypto decentralization.
Meanwhile, Star pointed out that the Tether freeze on TRON came just days after the network’s founder, that TRON is the most decentralized blockchain in the world after the Arbitrum incident. Sun has yet to comment on the Tether freeze on the TRON network, which occurred earlier this week.
Q&A
What did Tether do with the $344 million USDT?
Tether executed the largest freeze in its history, locking $344 million USDT across two addresses in coordination with U.S. law enforcement.
How does Tether's admin control affect decentralization?
Tether's admin control allows it to blacklist addresses, freeze balances, and destroy funds, demonstrating that true decentralization does not exist in this context.
What is the significance of the Arbitrum freeze related to Kelp DAO?
The Arbitrum freeze of assets stolen by the Kelp DAO exploiter further illustrates the ability of crypto networks to exert control over funds, challenging the notion of decentralization.
