Crypto commentator Star argued decentralization is a myth after recent freezes involving USDT on TRON and ETH on Arbitrum.
Star’s X post pointed to Tether’s largest-ever freeze — $344 million USDT — carried out on the TRON network in coordination with OFAC and U.S. law enforcement. Executed through the USDT smart contract, the funds remain visible on-chain but are unusable. Star noted this demonstrates Tether’s administrative control: the issuer can blacklist addresses, freeze balances instantly, and even destroy tokens, undermining claims of full decentralization.
Tether confirmed it supported the U.S. government in freezing the two TRON addresses once they were identified, saying the action prevented further movement. A CNN report said the freeze was directed because the funds were linked to Iran, which has previously preferred Bitcoin over stablecoins for some payments amid seizure concerns. The TRON freeze occurred days after TRON founder Justin Sun declared TRON “the most decentralized blockchain,” a claim Star highlighted as contradicted by the event.
Star also cited the Arbitrum response to the Kelp DAO exploit as additional evidence. Arbitrum’s Security Council froze 30,766 ETH held in an address connected to the exploiter after consulting with law enforcement. The Kelp DAO attacker is reported to have stolen up to $292 million in staked ETH from a bridge. Reactions were mixed: some observers pointed out the irony of a network praised for decentralization taking centralized action, while others, including Helius CEO Mert, defended the freeze as the morally right step to prevent exploiters from benefiting.
Together, the TRON/Tether and Arbitrum incidents highlight how administrative controls and emergency governance mechanisms allow centralized interventions on chains and tokens often described as decentralized, prompting renewed debate over what decentralization means in practice.
