Tether's USDT can permanently zero out blacklisted addresses

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Ethereum news: Tether’s USDT contract on Ethereum and Tron has included a destroyBlackFunds function since 2017. This function sets the balances of blacklisted addresses to zero, reduces the total supply, and permanently logs the event. Only Tether’s multisig wallet can trigger it. The U.S. Department of Justice cited this feature in a March 2025 case involving $9 million in USDT. Ethereum ecosystem news: Unlike USDC, USDT can permanently remove balances, operating under an owner-controlled model.

ChainCatcher report: The X account @blockchainchick posted that the Tether USDT contract has included the destroyBlackFunds function since its deployment on Ethereum in 2017. This function first verifies that an address has been blacklisted, then reads its balance, sets the balance to zero, deducts the corresponding amount from the total supply, and logs the event—no function exists to reverse this action. The account stated that the related blacklist function refers to targeted addresses as _evilUser, and only Tether’s multisig owner can invoke it on Ethereum and Tron. It also noted that Tether can subsequently mint an equivalent amount of USDT to designated addresses, leaving the net supply unchanged; the U.S. Department of Justice described this process in a forfeiture case in Massachusetts in March 2025, involving approximately $9,016,612 in USDT. The account further claimed that USDC can restrict wallets but cannot destroy balances, and that this mechanism has been operational with an owner on both Tron and Ethereum, whereas Bitcoin does not have such a feature.

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