Tether Refuses to Confirm or Deny Dropping USDT on Tron Network

Feb. 23, 2024
Tether Refuses to Confirm or Deny Dropping USDT on Tron Network

Tether, the issuer of the popular stablecoin USDT, has refrained from confirming or denying whether it plans to discontinue support for the Tron network, following a similar move by its competitor Circle. On Tuesday, Feb. 20, Circle announced that it would halt the minting of its stablecoin, USD Coin (USDC), on the Tron blockchain.

Tether’s Response to Circle’s Move

In response to inquiries about Circle’s decision and plans regarding Tron, Tether replied that their issued tokens are on several blockchains. They also mentioned that these tokens act as a “transport layer” for the tokens.

Tether also stated that it could freeze transactions on each supported blockchain to meet compliance requirements. This action would allow the company to monitor the safety of supported blockchains proactively.

Tether’s USDT stablecoin currently leads the outstanding market capitalization with $97.7 billion, whereas Circle’s USD Coin (USDC) trails at $28 billion, according to CoinGecko data.

The Tron network hosts more than 51.8 billion USDT, compromising over half of the nearly 101 billion USDT tokens issued across multiple blockchains, according to Tether’s transparency report dated Feb. 21. The network has allocated close to $76.2 million for near-term liquidity.

Source: Tether

Tether’s comments came after Circle announced a wind-down of USDC minting on the Tron network. Circle plans to gradually reduce support for Tron while focusing on efforts to maintain trust, transparency, and safety for USDC users.

In January, a United Nations report pointed out that USDT, running on the Tron blockchain, was becoming the favourite of cyber fraud and money laundering across Southeast Asia due to its convenience in transacting anonymously at low fees. Tether turned down the report, noting that USDT is traceable and cooperative with police.

Network’s Role in Stablecoin Controversy

Tether announced that it had frozen more than $300 million of USDT in the past few months due to its use in criminal activities. In November, $225 million was frozen due to a United States investigation focused on a human trafficking syndicate based in Southeast Asia.

A Washington-based group called the Campaign for Accountability wrote to the United States Senators in November 2023. The United Nations report accused Tron of involvement in actions by international law enforcement. These actions aimed to recover billions of dollars transacted by organized crime groups.

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the Tron Foundation and its founder, Justin Sun, in March 2023. The SEC accused them of offering unregistered securities and conducting manipulative trading, allegations that Sun has denied.

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Rida Fatima

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An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.