Tether is hesitating to confirm whether it will continue supporting USDT on the Tron network, following Circle’s decision to withdraw from the network for security reasons.
Uncertain position amid security concerns
Tether, the largest issuer of stablecoins in the market, has not clearly indicated whether it plans to stop supporting USDT on the Tron network after Circle, its competitor, ceased issuing its stablecoin on this blockchain on Tuesday, February 20.
Regarding whether Tether would follow a similar approach to Circle’s, the company stated:
Tether tokens are issued on multiple blockchains, which simply serve as transport layers for these tokens.
Tether highlighted its ability to freeze transactions on each supported transport layer to fulfill its compliance obligations, while actively monitoring the security of each supported blockchain.
USDT on Tron: A major player
With a market capitalization of $97.7 billion, Tether dominates the stablecoin sector, with Circle’s USDC following closely with $28 billion. The Tron network hosts over 51.8 billion USDT, representing more than half of the billions of USDT issued on multiple blockchains. Tether has also set aside $76.2 million to provide short-term liquidity for the token on the Tron network.
Responses to security and regulatory concerns
Tether’s response comes after Circle’s announcement to immediately stop issuing USDC on Tron, citing efforts to maintain trust, transparency, and security of USDC. In January, a United Nations report referred to USDT on Tron as a preferred choice for online fraud and money laundering in Southeast Asia, an allegation that Tether has contested by highlighting the traceability of USDT and its collaboration with judicial authorities.
Tether has frozen over $300 million worth of USDT associated with criminal activities in recent months, including $225 million in November 2023 as part of a US investigation into a human trafficking network in Southeast Asia.
Legal and ethical implications for Tron
The Tron network and its founder Justin Sun were sued by the US Securities and Exchange Commission (SEC) in March 2023, accused of offering unregistered securities and manipulating exchanges, allegations that Sun denies.
