Tether Freeze Highlights Centralized Stablecoin Control Concerns
Ripple's former CTO, David Schwartz, has defended Tether's decision to freeze $42.4 million in USDT before receiving a formal court warrant. This move highlights a broader question about centralized stablecoin control and raises concerns about the power of issuers like Tether.
The lawsuit against Tether was filed by two Thai businessmen who alleged that the company blacklisted 10 Ethereum addresses containing $42,417,785.62 USDT on October 30, 2025, after an informal request from Homeland Security Investigations. A formal seizure warrant was issued months later, on February 19, 2026.
Schwartz argued that Tether had little practical choice but to secure the assets while competing ownership claims were unresolved. This position is especially interesting because Ripple itself operates a competing regulated stablecoin, RLUSD, which has similar terms and reserve broad powers for the issuer.
The Same Question Applies to RLUSD