Tether briefly blocklists $1.45M in THORChain vaults

Tether reportedly blocklisted four THORChain TRON USDT vaults holding about $1.45 million on Oct. 9. TRON swaps, transaction signing and liquidity-provider activity later halted before the addresses appeared unfrozen and trading resumed.

Researcher Khal identified the vaults at block 86,958,330. They were four of THORChain’s six TRON vaults and held about 93% of the protocol’s TRON USDT. Roughly $363,000 in payouts entered a queue during the interruption.

The vaults were reportedly frozen at 1:36 p.m. UTC. At 3:35 p.m. UTC, THORChain co-founder Chad Barraford reported that the addresses appeared unfrozen and that trading would resume soon. Khal reported at 3:58 p.m. UTC that TRON USDT swaps had resumed.

Barraford indicated that THORChain received no advance communication and did not know why the addresses had been restricted. Khal reported that the four vaults may have been included in a wider blocklist covering about 30 other wallets.

The affected USDT was held in accounts controlled by THORChain validators. The validators use distributed signing to authorize transactions on external blockchains, including TRON. That arrangement determines who can approve a transaction, while Tether can still restrict transfers of USDT held in those accounts.

Tether’s wallet-freezing policy cites sanctions requirements, including the U.S. Office of Foreign Assets Control’s sanctions list, and can extend to wallets in the secondary market. The cause of the temporary restriction on the THORChain vaults was not established.

The interruption followed scrutiny of THORChain’s September trading activity, which coincided with transactions linked to the Bitget hack. THORChain has maintained that it does not selectively block individual addresses. Its node operators can pause a chain or the wider protocol for security reasons.