A report from blockchain compliance firm AMLBot revealed that a delay in Tether's wallet blacklisting allowed over $78 million in illicit USDT transfers before enforcement actions began. The delay arises from Tether's multisignature contract setup on Ethereum and Tron, which prolongs the blacklisting process. The initial transaction notifies of impending blacklisting, but full enforcement isn't executed until a later confirmation, creating a window for dishonest actors to move funds. For instance, in one case, a blacklisting was submitted at 11:10:12 UTC and enforced at 11:54:51 UTC, a span of 44 minutes. During such delays, AMLBot reported that over $28.5 million was withdrawn on Ethereum and $49.6 million on Tron, indicating a frequent exploitation of this lag. The report draws attention to the systemic vulnerabilities within Tether's compliance mechanisms, raising concerns about the efficacy of such measures.

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