Tether Used Centralized Power To Refund The Wrongly Sent $1 Million

Tether used centralized power to return the wrongly sent $1 million after a group of Defi traders mistakenly sent them and Tether helped recover the funds. In our tether crypto news today, we reading more about how Tether managed to return the funds.

Tether helped recover the $1 million in lost stabelcoins after traders sent them to the wrong address. Tether is able to perform these recoveries thanks to the centralized control of the platform. Tether used centralized control as it allows it to work with law enforcement officials in order to fight illegal activity. So far, the biggest stablecoin provider in the crypto ecosystem has criticized for its centralized design. That aspect of the business has now shown its usefulness.

#DeFi craziness is going out of hand. Feels like 3 years ago.
DO NOT SEND FUNDS TO PROJECTS THAT ARE NOT WELL ESTABLISHED OR DON'T HAVE PROPER AUDITS. https://t.co/bRSACHYnUd

— Paolo Ardoino (@paoloardoino) September 15, 2020

The CTO of Tether Paolo Ardoino announced that Tether returned the $1 million worth of dollar-pegged tokens to a group of investors that sent USDT to the wrong address. The funds were lost after a group of anonymous Chinese Defi users sent them to a contract address that is associated with Swerve Finance, the clone of Curve Finance that is intended to launch and to operate with the equitable token distribution. The target address accepted a few stablecoins as a part of the DeFi stablecoin swap protocol but wasn’t set up to receive Tethers.

After the support team of the platform confirmed that the original tokens were unable to be retrieved from the Swerve Finance contract, Tether froze the address and revoked the ability for Tether’s to be sent or received ensuring that the tokens cannot go into circulation again. If Swerve accepts Tether at some point, the receiving address can be replaced in order to accommodate user deposits. Tether’s move injects a very interesting angle to the debate over-centralization in the Defi space and crypto as it throws some light on what is usually seen as a dark aspect of the stabelcoin market.

USDC which is another stablecoin backed by Coinbase and Circle uses a centralized design that has the capability to block addresses from transacting by using the coin. Both Tether and Circle revealed that they work with law enforcement to track illegal activity using their stablecoins so that these activities account for most of the address-blocking and other activities that are enabled in the centralized control of the platforms.