Tether's Hidden Power: How a Single Company Controls Billions in Frozen Cryptocurrency

Tether's control over its USDT token supply is not limited to exceptional emergency measures. Rather, it is a fundamental feature of the smart contract architecture that is integrated at deployment and persistent across all supported blockchains.

This means that Tether has the ability to freeze addresses holding USDT through three privileged functions within the smart contract: Freeze, Unfreeze, and Destroy. These functions are restricted exclusively to the multisignature wallet controlled by Tether Ltd.

The Freeze function is used to inhibit outgoing transfers from a target address, while the Destroy function permanently burns the USDT balance held at the target address, reducing the total circulating supply on that specific chain. In 2025, Tether destroyed approximately $698 million in USDT, representing 55.6% of the total value frozen during that year.