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Category: CRYPTO NEWS
The post $78 Million Lost to ‘Laundering Loophole’ in Tether Freezing Method Since 2017 appeared on BitcoinEthereumNews.com. In brief A delay between the request to freeze an address and its on-chain execution for Tether’s USDT stablecoin was found by blockchain forensics firm AMLBot. Tether blacklists addresses connected to illegal activity, freezing the wallets from moving assets issued by the company. As a result of the freeze delay, AMLBot’s report claims, malicious actors got away with more than $78 million on Ethereum and Tron since 2017. There is “significant lag” between exchanges saying they’re going to freeze USDT held by malicious addresses and, well, actually doing it, according to a new report from AMLBot. AMLBot’s report found that on-chain freezing enforcement of Tether’s USDT stablecoin has been sluggish. As a result, the anti-money laundering firm said, at least $78 million has been lost to bad actors on Ethereum and Tron since 2017. The “laundering loophole” is the result of Tether’s multi-signature contract set up, AMLBot explained in the report. First, a freeze request is sent on-chain which requires multiple signatures to approve before the freeze can be executed. As a result, a “window of opportunity” is created allowing illicit actors to move funds before their address is frozen. One example provided in the report showcases a 44 minute delay between the freeze request and confirmation on Tron. AMLBot claims that $49.6 million has been withdrawn by bad actors on the Tron network since 2017 as a result of the vulnerability. Wallets were able to make up to three transactions during the delay window with 4.88% of blacklisted wallets exploiting the lag on the network. Meanwhile on Ethereum, the firm found $28.5 million USDT withdrawn within the same timeframe. Totalling $78.1 million across the two chains. “Yes, this structure introduces a short delay, but it’s a trade-off for responsible responsiveness to a $100+ billion ecosystem. We are actively refining…
2025-05-16T03:35:33+00:00