Tether’s Ambiguity on Dropping USDT Support for Tron

Tether remained non-committal about discontinuing support for the Tron network.

On Tuesday, competitor Circle stopped minting its stablecoin on the blockchain, while stablecoin maker Tether remained evasive when asked if it would stop supporting the Tron network.

Tether stated that they issue Tether tokens on several blockchains, which serve as transport layers for such tokens. In order to fulfill its compliance obligations, Tether is still able to freeze transactions on every transport layer that it directly supports. To maintain the highest standards for our community, Tether actively monitors the security of every supported transport layer the company stated.

According to CoinGecko data, Tether (USDT) has the greatest market capitalization of any stablecoin at $97.7 billion, followed by Circle’s USD Coin (USDC) at $28 billion.The Tron network hosts over 51.8 billion USDT, representing more than half of the nearly 101 billion USDT tokens generated across various blockchains as reported on February 21.

They have set aside an additional $76.2 million to provide short-term liquidity for the token on the Tron network. It’s remarks followed Circle’s announcement on February 20 that it would promptly cease minting USDC on Tron and progressively discontinue support for the network.

Tether stated that this move was in line with its “efforts to ensure that USDC remains trusted, transparent and safe. “Due to the “ease, anonymity, and low fees of its transactions,” a United Nations assessment from last month stated that “USDT on the Tron blockchain has become a preferred choice” for cyber fraud and money laundering in Southeast Asia.

They rejected the assessment, claiming that the UN had disregarded USDT’s traceability and the company’s track record of working with law enforcement. It stated that it froze over $300 million in USDT used for illegal activities “within the last few months,” with $225 million frozen in November 2023 as part of an American investigation into a human trafficking organization operating in Southeast Asia.

In a November letter to Congress, the ethics watchdog group Campaign for Accountability reported that Tron’s involvement in multiple international law enforcement actions included billions of dollars in transactions by alleged organized crime groups and sanctioned entities. 

In March 2023, the U.S. Securities and Exchange Commission filed a lawsuit against Justin Sun, the creator of the Tron Foundation, claiming that Sun engaged in manipulative trading and marketed unregistered securities. Sun disputes these claims.