Crypto community criticizes Tether for blacklisting wallet that drained $20M from MEV bots

Several crypto stakeholders person criticized USDT issuer Tether for blacklisting a validator code that drained $25 cardinal from maximal extractable worth (MEV) bots.

The MEV bots were drained of implicit $20 cardinal connected April 3 portion executing a sandwich trade. The blacklisted code exploited a bug successful the MEV-boost relay to back-run the bot’s transactions and stole 3 cardinal USDT and $22 cardinal successful ERC-20 tokens.

With the blacklisting, Tether has present frozen the 3 cardinal USDT from the exploit.

Crypto stakeholders knock Tether

Polygon co-founder Jaynti Kanani described the incidental arsenic a “bad precedent,” portion on-chain sleuth ZachXBT called it “disappointing.”

Fastlane co-founder Thogard said this was the “most concerning DeFi improvement of 2023.” Thogard added:

“The bot ‘victims’ signed those transactions and sent them to the relay. They were executed. The exploit wasnt successful DeFi. Tether’s artifact implies they person an sentiment connected eth’s statement / societal layer.”

Meanwhile, assemblage members person speculated connected wherefore Tether blocked the address. On-chain researcher ZachXBT believes Tether apt got a tribunal bid to blacklist the wallet, portion others said it was evidence that influential radical were down the MEV bots.

Tether was yet to respond to CryptoSlate’s petition for remark arsenic of property time.

MEV bots are automated high-frequency traders that trust connected the velocity and complexity of the blockchain to seizure arbitrage opportunities. The sandwich commercialized the bots wanted to execute would person taken vantage of traders by front-running their transactions.

The station Crypto assemblage criticizes Tether for blacklisting wallet that drained $20M from MEV bots appeared archetypal connected CryptoSlate.