Security analyst calls out exploit window in Tether's on-chain freeze process

Darcy, a blockchain asset-recovery investigator and co-founder of FlashRescue, has revealed that targeted money slipped out of a wallet while Tether was in the middle of freezing it.

So far in 2026, Circle has faced multiple rounds of criticism for freezing flagged or stolen funds too rarely. And now, Tether, which has long been praised for freezing funds, is receiving criticism for how cleanly the freezes it does run actually execute.

What is Tether being criticized for?

Darcy from FlashRescue, who posts on X (formerly Twitter) as @DarcyAri and works on joint investigations with partner firms, wrote on August 6, 2026, that during a recent case, the flagged funds at one address were allowed to be moved even as the freeze was being carried out by Tether. That delay reduced the total amount that they could freeze.

The stablecoin issuer has long been praised for its speed in freezing funds, especially compared to its main rival, Circle (USDC). However, this new criticism suggests that during the execution of Tether’s freezes, there is a significant time gap between proposal and finalization on the blockchain.

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