Centralised cryptocurrencies and what to do if your USDT address is blocked
Did you know that not all cryptocurrencies are the same? And no, we don’t mean the obvious differences that everyone knows about. In this article, we will explain why some “cryptocurrencies” are not decentralised and what consequences this can lead to.
Decentralised cryptocurrencies
Generally speaking, a decentralised cryptocurrency (e.g. Bitcoin) is one that is controlled (managed) by all participants in the cryptocurrency’s network. In other words, information about addresses, transactions and, consequently, balances are recorded in one decentralized database that is stored by all participants in the respective network. Any changes to this database must be coordinated with the other participants, making its manipulation impossible. Thus, decentralised cryptocurrencies cannot be blocked or restricted by anyone, including government authorities, law enforcement agencies, bailiffs, ex-spouses, etc.
Centralised cryptocurrencies
Centralised cryptocurrencies such as Tether (USDT), on the other hand, function in a very different way. Their database is stored using blockchain technology, but control of the database is entirely in the hands of one or more organisations. This means that, in the present case, Tether can block any transaction and any address at any time.
It could be said that Tether functions just like a bank. Tether has full control and can freeze assets without giving any explanation. And while if your bank blocks your account, you know who to turn to, with Tether things are completely different. Most often the bank is in your own country or in a jurisdiction that has predictable legislation and a clear regulatory framework. Tether on the other hand is registered in the British Virgin Islands, with plans to move to El Salvador. To make the confusion complete, Tether also has a head office in Hong Kong. All of this makes communication with Tether extremely problematic.
Tether blocks more and more addresses containing USDT
In recent months, VD&A specialists have been receiving more and more requests for assistance from USDT holders whose addresses are blocked by Tether. The frozen amounts range from several thousands to many tens of millions of USDT (1 USDT = 1 USD).
Most often, the blocked amounts are between one and five million USDT/USD
These blocks are very often initiated by law enforcement agencies, but we have reasons to believe that Tether also sometimes blocks certain addresses without legal justification. Address freezes, even when requested by government agencies, are also often unjustified.
Needless to mention what disastrous consequences freezing an address can lead to. The affected cryptoasset owner has virtually nowhere to go. Communication with Tether, whether in Hong Kong or the British Virgin Islands is, to say the least, problematic. Tether is not regulated by any reputable institution to which victims could have recourse. Very often, especially if the amounts blocked are not huge, address owners give up and lose their USDT. When the amounts are large, for example over 5 million, victims always seek legal assistance, which very few organisations in the world can offer.
VD&A assists with legal action to unfreeze blocked USDT addresses
Due to the overwhelming number of requests for legal assistance to unblock frozen Tether addresses, VD&A has set up a dedicated department to deal with such cases. VD&A attorneys provide highly qualified legal services to investors around the world whose USDT addresses have been blocked. Of course, the organization’s policy is to assist only individuals who can prove the legal origin of their funds. In doing so, VD&A adheres to the highest standards of privacy and confidentiality.
For more information or for assistance with unblocking frozen USDT, you can visit: Legal assistance when your crypto assets are frozen