Stablecoin issuer Tether has helped users recover $87 million in USDT sent to wrong addresses since its launch in 2014, its CTO Paolo Ardoino told The Block.
Just earlier this week, for instance, Tether recovered nearly $1.5 million in USDT on behalf of users, according to Ardoino. As The Block has reported previously, Tether has a recovery mechanism in place that allows it to blacklist addresses on the Ethereum and Tron blockchains, freeze funds in those addresses, and issue new USDT tokens to affected users.
“Some users make mistakes when sending tokens to DeFi [decentralized finance] projects or trading platforms, which result in tokens being sent to smart contracts or addresses that do not have the functionality to recover the funds,” said Ardoino.
“As part of the recovery process, Tether has to blacklist the address in order to recover a token. This revokes all USDT held by that address and reissues an equivalent amount of USDT to an escrow address in order to process and return funds to their rightful owners. To be safe, Tether requires confirmation of ownership, among other information, to start the recovery.”
Tether’s recovery process isn’t a free service. The stablecoin issuer charges $1,000 or up to $10% of the recovery amount, whichever is greater, according to its website. That means it has made up to $8.7 million in fees. Tether accepts recovery requests for amounts exceeding $1,000.
Besides for its recovery mechanism, Tether also blacklists addresses because of regulatory reasons. Earlier this month, for instance, Tether blocked three Ethereum addresses holding over $160 million worth of USDT. At the time, Ardoino said, “Tether is cooperating with a law enforcement request, imposing a temporary freeze to allow the investigation to proceed.”
Tether has been a market leader since its launch. But last week, the total supply of its rival USD Coin (USDC) surpassed tether on the Ethereum blockchain and continues to remain higher. The current total supply of USDC on Ethereum stands at over 42 billion, whereas USDT’s total supply on the blockchain stands at nearly 40 billion, according to Etherscan. Across all blockchains, tether remains in the lead, according to The Block’s Data Dashboard.
© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.