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And why Bitcoin remains the only real alternative

With a market capitalization of about $186 billion, USDT has become the digital dollar for millions of people worldwide. However, behind this apparent stability lies a fundamental vulnerability: the token's issuer, Tether, has complete power over your funds. In the last six months alone, 2,362 addresses on the Ethereum and TRON networks have been blacklisted, with $1.64 billion frozen. Formally, such measures are aimed at hackers and scammers, but the very possibility of freezing calls into question any non-custodial wallet: the token holder does not have 100% control over them.

Together with the team behind the Bitcoin mixer Mixer.Money, we explore how the USDT freezing mechanism works, why even ordinary users can be affected, and why holding funds in stablecoins is riskier than in Bitcoin.

The Ardoino List: How Tether freezes USDT

USDT is a centralized stablecoin, and Tether does not hide this. Company CEO Paolo Ardoino emphasizes this feature, often contrasting USDT with Bitcoin. The ability to block an address and forcibly destroy tokens is embedded in Tether's smart contracts on Ethereum (ERC-20), TRON (TRC-20), Solana, and other networks. The functions may have different names, but the principle is the same:

• addBlackList — the address owner loses the ability to send USDT. Any transfer is rejected at the contract level, although the address itself remains active for receiving new tokens and managing the network's native coin (ETH, TRX, SOL);
• removeBlackList — removes the transfer restriction;
• destroyBlackFunds — irreversibly burns USDT at the blocked address. They cannot be recovered.

After burning, Tether can issue an equivalent volume of tokens at another address. As Mixer.Money notes: "In other words, the issuer can take dollars from one address and reissue them in favor of another." According to BlockSec, it takes an average of about two days between issuing a freeze order and its execution on the network.

Promissory Note vs. Digital Gold

Behind every freeze is an external request from law enforcement agencies. Tether freezes an address based on a single verified request, without warning the holder or any appeals procedure. The T3 Financial Crime Unit (T3 FCU), established in September 2024 in partnership with TRON and TRM Labs, had frozen over $450 million across 23 jurisdictions by May 2026.

The stablecoins themselves for freezing are identified by on-chain analytics companies — Chainalysis, Elliptic, TRM Labs. They assign risk levels to wallets and link them together. If an address receives a high risk score, AML systems also raise the assessment for wallets associated with it. Sometimes, ordinary users whose coins once passed through a deemed "dirty" address end up under restrictions.

Analysts also track Bitcoin, but it is impossible to take it away from the owner without private keys. USDT and USDC are debt obligations of a centralized issuer. It retains control at the contract level: blocks transfers, burns balances, reissues amounts. The holder controls the private keys, but not the token's rules. Bitcoin has no administrator, no blacklist function, and no "big red button" called destroyBlackFunds. There is simply no one to execute such a request.

Privacy After Conversion

Converting USDT to Bitcoin removes the risk of freezing at the issuer level but does not eliminate on-chain surveillance. The first cryptocurrency is not anonymous but pseudonymous. Additional tools are required to hide the link between addresses:

• CoinJoin — joint mixing of coins from several users in a single transaction. However, this mechanism is easily detected by analytical systems, which can increase the address's risk score;
• Centralized mixers — accept funds into their own pool and send other coins. This breaks the direct on-chain link but requires trust in the operator;
• Bitcoin mixers using verified coins — for example, Mixer.Money. They do not mix users' funds with each other and do not use their own liquidity pool. Instead, they utilize verified clean coins from trusted investors, which breaks the link between the incoming and outgoing transactions.

In "Full Anonymity" mode, coins are split into random parts in a premixer and sent to independent investors. After a random interval, the sender receives an equivalent amount minus a fee to two new addresses unrelated to the original wallet.

Panopticon Tether

The freeze function helps investigate crimes and return funds to scam victims. T3 FCU has been involved in cases related to money laundering, drug trafficking, terrorist financing, and the activities of North Korean hacker groups. FATF has called the unit an "invaluable resource for law enforcement agencies." Such activities contribute to growing regulatory trust in the crypto industry as a whole.

But this system also has a downside. USDT remains a centralized asset, and access to funds ultimately depends on the issuer's decisions and requests from authorities. In essence, the stablecoin has become a node in a global surveillance system: a private company, connected to hundreds of agencies and analytical services, capable of freezing "digital dollars" almost anywhere in the world.

The USDT ecosystem resembles a digital panopticon: most users never directly encounter restrictions but know that such a possibility exists. The effectiveness of this mechanism strengthens regulatory trust but simultaneously blurs the boundaries of financial autonomy. "Diversification" among major stablecoins only spreads the dependence on one company, but the freeze architecture itself remains.

Bitcoin has neither an administrator nor a single control center, so there is simply no one to execute a request to freeze funds at the protocol level. This makes it the only major digital asset that does not depend on decisions by an issuer, regulator, or bank. The first cryptocurrency cannot be frozen, seized, or burned by a third party's decision, and its issuance rules remain unchanged regardless of state inflation policies and legislative changes.

My professional opinion: The stablecoin market continues to grow, but with each new case of USDT freezing, we see how centralization undermines the very idea of decentralized finance. For those who value true financial freedom, Bitcoin remains not just an asset but the only tool not subject to the whims of third parties. However, remember: even Bitcoin does not guarantee privacy — additional solutions like Mixer.Money are needed for that.