Each disabled token is pure profit to Tether. They're not cashing them out to the US Treasury, as with Bitcoins recovered from criminal operations.
Maybe it's better to look at cryptocurrencies as financial securities, shares in an asset controlled by a private company (as has been said many times before). Could General Electric 'disable' the shares of a shareholder? What would that mean? The shareholder can't sell their shares, I suppose, but GE's equity would remain the same (not counting any market movement that would be caused by the sale).
Imagine a monetary system where currency was profit to a private company. What will our once-proud industry think of next? Software to help landlords collude, take housing off the market, and jack up rents? Software that impersonates humans, as well as any form of truth? We are on a roll!
These cases are temporary, but I suspect there are also permanent trading bans that might be caused by legal action - if, for example, an employee is found guilty of a crime, or is under a wage garnishment order.
Also, crypto has long had the phenomena of coins that get "locked" and can never be touched or transferred again, simply through holders that have died or lost the private key. For example, the original "Satoshi coins" - the roughly 1M Bitcoin (~$45B at today's prices, enough to make their holder the 27th richest person in the world) mined by Satoshi before Bitcoin became mainstream - have never been spent, and it's likely that their owner is dead. They simply drop out of circulation, and the price of all other Bitcoin rises to compensate.
> They simply drop out of circulation, and the price of all other Bitcoin rises to compensate.
Would that be different for Tether? Isn't Tether a 'private' blockchain that the company controls?
It's debatable whether Tethers are actually backed by dollars 1:1; people have long suspected that Tether Ltd mints them out of thin air based simply on promises (i.e. fraud). And occasionally the price has dropped below $1 as suspicions grow and folks try to exit Tether. So it's good for the company to have Tether holder accounts locked, as it means they have fewer liabilities and less chance of a bank run.
You're being facetious right?
A suit last month alleges just that .
https://arstechnica.com/tech-policy/2023/11/14-big-landlords...
When coins are lost, they stop circulating; that amount - of active, unique coins - is the M1 value, or the amount of circulating currency. Just like if you burn a key, or mint or destroy a trillion dollar coin thats in the Reserve, or disable shares, the value is derived from the scarcity of the resource.
Technically the "uncirculated" money has value, but only as "capital", as it's generally a liquid asset or borrowed against collateral. Uncirculated currency and coins are generally just a very flat asset, just eroding by inflation.
For example, if Charles Schwab created Schwab USD upon every fiat deposit, the growth and redemption distribution would be similar to Tether. People that can save and populate an investment account do that more than they ever actually withdraw to cause a redemption.
[1] - https://www.forbes.com/sites/brandonkochkodin/2023/03/31/us-...
EDIT: I see now that you were actually comparing the case of USDT freeze against Bitcoin seizures. Nevertheless, Tether doesn't simply get to keep the USD value of the frozen tokens. US government would want to recover that.
This, in practice, means that the US government controls the mentioned tokens for the moment. What happens with them depends entirely on the outcome of the investigation.
30 warehouses or so, hundred websites, single code repository with a handful of developers.
Developers recently closed an open issue an American miner raised with OFAC compliance and the software, and even being able to help write the patch.
Beyond freezing, BTC can even be reissued via a module written expressly for such a purpose.