A delay in the Tether wallet blacklisting process has allowed over $78 million in illicit funds to be transferred before enforcement actions were implemented, as per a recent report by blockchain compliance company AMLBot. The report highlighted that Tether’s address blacklisting takes effect only after a significant delay from initiation on Ethereum and Tron blockchains, creating a loophole for illicit actors. The process involves a multi-step procedure with a warning transaction followed by confirmation to blacklist an address. This delay window provides an opportunity for malicious actors to move or launder funds before the freeze takes effect. The report emphasized the importance of timely enforcement to prevent such activities. Tether responded by explaining that the delay is due to their multisignature governance model, aimed at preventing unilateral freezes and maintaining system integrity. The company reassured its collaboration with law enforcement agencies worldwide to track and freeze illicit funds swiftly. Despite the reported delay, Tether is actively working on refining the process to deter bad actors from exploiting the system. AMLBot’s data revealed significant amounts of USDT being withdrawn during the delay window, raising concerns about the effectiveness of Tether’s enforcement actions. Tether has previously frozen millions of USDT linked to illicit activities in collaboration with Tron and analytics firms, highlighting its commitment to compliance. The ongoing efforts to improve the blacklisting process aim to enhance the security and integrity of the Tether ecosystem.