Tether Frozen over $4.5 million USDT, involving a Mercado Bitcoin security incident

Tether has frozen over $4.5 million USDT related to the security incident on November 2nd with Mercado Bitcoin. Meanwhile, during the investigation of suspicious fund movements, this Brazilian exchange has suspended deposits and withdrawals.

• Tether CEO Paolo Ardoino confirms that over $4.5 million USDT has been frozen.
• Mercado Bitcoin indicates that the incident has been controlled, no customers were affected, and no data leakage occurred.
• During the exchange's investigation and tracking of affected assets, recharges and withdrawals were temporarily suspended.
• The exchange announced five types of target addresses on blockchain to support tracking efforts.

Tether CEO Paolo Ardoino announced freezing measures while sharing the official statement on this security incident by Mercado Bitcoin. Previously, reports indicated that the amount of suspicious funds flowing out exceeded 40 million US dollars; whereas Ardoino provided a specific amount of USDT that has been frozen and is related to this incident.

Ardoino wrote: "Tether has frozen over 4.5 million USDT related to this security incident."

This statement describes a 'freeze' and does not indicate that these tokens have been returned to Mercado Bitcoin. The exchange's own updates are mainly focused on controlling the incident, tracking assets, and safely resuming operations.

Mercado Bitcoin suspends transfers after controlling the event

In the initial statement, Mercado Bitcoin indicated that earlier in the morning of that day, they discovered and quickly controlled a security incident that affected one of the company's systems.

The exchange stated that customers did not suffer any losses, and there was no data breach. It mentioned that the temporary suspension of deposits and withdrawals was a preventive measure taken to protect the platform's security during the team's investigation period.

According to Mercado Bitcoin, the relevant teams are tracking the assets and coordinating response measures with the authorities. The statement does not mention any customer compensation process, which is consistent with the company's claim that "customers have not suffered any losses."

In a subsequent update, the company stated that it is continuing to work hard to safely resume operations and will continue to keep customers informed through official channels. This update still focused on resuming work and asset tracking, and did not announce that recharges or withdrawals had been resumed.

Therefore, for customers, operational restrictions and the exchange's guarantee of account balances are two different things: Mercado Bitcoin indicates that customers are not affected, but the transfer services in and out of the platform are temporarily unavailable.

The exchange announced five types of blockchain addresses

In subsequent updates, Mercado Bitcoin published the target addresses identified in the transactions related to this incident, which cover networks compatible with EVM, Bitcoin, Solana, Stellar, and Tron.

The company stated that releasing these addresses is to assist in monitoring and tracking assets on the blockchain network. It specifically noted that this list is intended for identification and tracking purposes only.

In the entry EVM, the address listed by the company is 0xe485e7A70b1131216Cb47CA4555c4Bbb2C742478. There are also separate entries listing the target addresses for BTC, SOL, XLM, and TRON to provide reference for investigators and other market participants in tracking transactions related to this event.

This disclosure does not provide the amount in US dollars corresponding to each target address, nor does it indicate how many affected assets there are on each network. The statement from Ardoino also does not explain how the frozen USDT is distributed among the published addresses.

Brazilian media BitNot í cias reported that security company Hypernative identified suspicious transfers totaling over 40 million US dollars from wallets attributed to Mercado Bitcoin. According to the report, these fund movements involved at least 10 newly created target addresses on various blockchain networks.

The estimates of capital outflows mentioned in the reports and the amount frozen under Tether represent different figures: the former refers to suspicious transfers across various assets and multiple networks, while the latter refers to the quantity of USDT that has been frozen by the issuer USDT. Neither announcement provides the final total amount that can be recovered.

Hypernative has previously participated in the construction of Brazil's monitoring system.

Reports of an alert issued regarding Hypernative come shortly after the company's previous collaboration with the Brazilian financial industry.

According to a report from crypto.news in August, the Central Bank of Brazil jointly developed a real-time encrypted threat monitoring and early warning sharing system with Hypernative. Both Mercado Bitcoin and Foxbit are listed as exchanges that plan to integrate into this system.

The project aims to distribute alerts between banks and cryptocurrency companies when suspicious funds flow within the financial system. The testing phase has been completed at that time, and the participating institutions are preparing their respective systems to receive and re-distribute these alerts.

The previous report described the development of that monitoring project and the planned participants. However, a statement issued by Mercado Bitcoin on November 2nd outlined their own investigations and coordination with authorities, without specifying which early warning sharing infrastructure was used in this incident.

Tether has demonstrated the freezing process in past law enforcement collaborations in the United States.

Tether previously stated that freezing assets is a way to prevent further movement of funds related to suspected illegal activities.

In a announcement on April 23, the issuer stated that after receiving information regarding suspected illegal activities, it had supported the US authorities in freezing $344 million of USDT from two addresses.

At that time, Tether indicated that it had cooperation with over 340 law enforcement agencies in 65 countries. The collaboration it disclosed included more than 1,200 cases related to US law enforcement.

Regarding the incident of Mercado Bitcoin, the exchange stated that its team is still continuing to track the assets and working hard to resume operations. Subsequent updates will be released through official channels.