TL;DR:
- An analysis of 2,955 events on Ethereum and TRON found an average delay of 2 hours, 16 minutes, and 15 seconds between the lock proposal and its formal execution.
- A total of 60 addresses completely emptied 20.4 million USDT in transfers initiated approximately 14 minutes after the request was submitted.
- An additional 113 wallets completed partial transfers totaling approximately 35.5 million USDT before the action was finalized on the blockchain.
On Thursday, investigator Darcy, co-founder of the firm FlashRescue, exposed operational flaws in Tether’s freezing protocol, noting that flagged funds were successfully transferred while the company was executing the lock order on the network.
The origin of this technical lag is attributed to the operation of the multi-signature scheme responsible for authorizing each administrative transaction. According to data presented in the FlashRescue investigation, the average time elapsed between issuing a lock proposal and its confirmation on the Ethereum and TRON networks reaches 2 hours, 16 minutes, and 15 seconds.
Analyzed records indicate that high-risk actors monitor smart contract activity to act on alerts. A group of 60 tracked addresses began moving funds just 14 minutes after the formal proposal was submitted, successfully withdrawing 20.4 million USDT before the freeze command took effect.
Additionally, report data reveals that another 113 addresses linked to suspicious activity completed partial withdrawals of their balances. Through these fast-execution maneuvers, the wallets managed to move nearly an additional 35.5 million USDT before being disabled.
The impact of this time gap was observed in regulatory actions taken in July 2026 against entities linked to Iran’s central bank. Following OFAC sanctions on four TRON wallets holding over $165 million in stablecoins, Tether froze $131 million, while roughly $34 million had already exited the system.
The Operational Contrast Between Tether and Circle in Managing Illicit Wallets
Observations regarding Tether’s reaction time coincide with the industry debate surrounding the freezing policies of its main market competitor. USDC issuer Circle faces criticism over its policy of intervening in addresses only upon explicit requests from courts or law enforcement agencies.
In this regard, investigator ZachXBT noted that since 2022, Circle’s preventive inaction enabled the movement of approximately $420 million in illicit funds. These incidents include the $280 million Drift protocol exploit, where assets were not blocked despite crossing native network bridges.
In response to findings regarding execution speed, Tether maintains that its strategy focuses on direct coordination with law enforcement agencies during active investigations. The firm’s official documentation indicates it has collaborated with more than 340 agencies across 65 countries, immobilizing over $4.4 billion in digital assets linked to more than 2,300 active cases.
However, the model’s limitations intensify when stolen assets are deposited into liquidity pools. On August 4, 2026, regarding the Gate exchange incident, Darcy specified that the likelihood of recovering assets drops drastically once illicit balances mix with unrelated capital, as the issuer avoids applying freezes to shared addresses where source balances cannot be cleanly isolated.
Tracking response metrics for the multi-signature infrastructure will remain under technical evaluation through Q3 2026, when independent analysts expect to publish comparative studies on the evolution of network confirmation times.
