Tether reimburses users for erroneous USDT transfers totaling $87 million

Since the stablecoin’s launch, the issuer Tether has reimbursed USDT to users totaling $87 million sent to incorrect addresses. The Block reported this, according to Paolo Ardoino, the company’s CTO.

According to Ardoino, Tether recently helped recover about $1.5 million. The recovery mechanism operates on the Ethereum and Tron blockchains.

“Some users make mistakes by sending tokens to DeFi projects or to trading platforms that lead to coins ending up in smart contracts or addresses with no mechanism for returns,” Ardoino explained.

To recover tokens, Tether adds the address to a blacklist and cancels the assets stored there. The company then issues an equivalent amount of USDT to an escrow address to process and return to the rightful owner.

“For security reasons, Tether requires proof of ownership among other information to begin the recovery,” added Ardoino.

The refund procedure is paid. The stablecoin issuer charges $1,000 or up to 10% of the reimbursed amount, whichever is greater. The company accepts recovery requests starting from $1,000.

Tether blacklists addresses not only for asset recovery but also for regulatory reasons. For example, on January 13, 2021 the company blocked three Ethereum wallets holding more than $160 million at the request of law enforcement.

On January 20, the list was expanded by 17 entries at once, bringing the total to 580 as of writing.

As reported, after adding support for the Avalanche blockchain, USDT became available on nine networks. Ethereum remains the dominant network for Tether, but in January the market leader ceded supremacy in it in terms of the volume of the USD Coin stablecoin from the Centre consortium.