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FollowingTEDA freezing mechanism is questioned: execution delays lead to capital outflows
Darcy, blockchain asset recovery investigator and co-founder of FlashRescue, revealed that during a time when Tether was executing a freezing operation, the target funds were actually transferred from the wallet.
Since 2026, Circle has been criticized many times for rarely freezing marked or stolen funds. Today, TEDA, which has always been praised for its speed in freezing funds, is being questioned because its freezing operation is not thorough enough.
Why is TEDA coin criticized?
Darcy from FlashRescue (posted on the X platform under the @DarcyAri account and conducted a joint investigation with a partner company) wrote an article on August 6, 2026, pointing out that in a recent case, even though TEDA was being frozen, funds in the marked address were still allowed to be transferred. This delay resulted in a reduction in the total amount that could ultimately be frozen.
The stablecoin issuer has long been praised for the speed with which it freezes funds, especially compared to its arch-rival Circle (USDC). However, this new criticism shows that there is a significant time lag between the proposal being proposed and the final confirmation on the chain when TEDA implements the freeze.
The problem with Circle is inaction. Its CEO Jeremy Allaire said at a news conference in Seoul that USDC issuers would freeze wallets "only at the direction of law enforcement agencies or courts."
On-line investigator ZachXBT pointed out that since 2022, there have been more than a dozen cases, including an approximately $280 million Drift Protocol attack involving North Korea. Circle held the power to freeze but failed to act, resulting in the escape of approximately $420 million in illegal funds. Wisconsin prosecutors have filed criminal charges against Circle after the company said it could not comply with court orders and recover the USDC of fraud victims.
Is there really a time difference in the freezing execution of TEDA coins?
An analysis of 2955 TEDA freezing incidents on Ethereum and Wave Field networks shows that the average time between the freezing proposal and its execution is 2 hours, 16 minutes and 15 seconds. This freezing mechanism is controlled by multi-signature wallets, which is the root cause of the delay.
Analysis found that at least 60 addresses transferred all assets they held before the freeze took effect, transferring a total of 20.4 million USDTs. On average, these transfers began only 14 minutes after the freezing proposal was submitted, and the main funds were transferred within 15 minutes. In addition, an additional 113 addresses successfully transferred some assets before the freeze was implemented, totaling approximately $35.5 million.
The most obvious public case of this time lag in the TEDA system was the company's action against the Central Bank of Iran in July. After the U.S. Office of Foreign Assets Control (OFAC) sanctioned four wave wallets that had received more than $165 million in stablecoins, TEDA froze $131 million of them, but about $34 million had been diverted when the block took effect. It is true that the losses account for a small proportion of the huge seizures-the total amount of TEDA's Iran-related freezes currently stands at about $475 million, including the $344 million that was frozen separately in April-but such a freezing mechanism with a huge time lag could be exploited by sophisticated adversaries.
TEDA said it "coordinated directly with investigators as cases proceed rather than passively reacting after funds were dispersed," and said it had cooperated with more than 340 law enforcement agencies in 65 countries to handle more than 2300 cases and helped freeze more than $4.4 billion in assets.
In a post on August 4 about the theft of the Gate Exchange, Darcy said that once stolen funds enter an address and are mixed with unrelated funds, there is almost no hope of recovering lost assets because TEDA rarely freezes a pool of funds that cannot be clearly attributed.
