Tether Freezes $4.5M USDT as Brazil's Mercado Bitcoin Halts Transfers After Breach

Tether has blocked more than 4.5 million USDT tied to a security breach at Mercado Bitcoin, Brazil's largest crypto exchange, which suspended deposits and withdrawals on Monday while it investigates the incident.

The stablecoin issuer's chief executive, Paolo Ardoino, disclosed the freeze in a post on X, writing: "Tether froze more than 4.5M USDT related to this security incident." The move came after blockchain security firm Hypernative flagged more than $40 million in suspicious transfers potentially linked to the breach, according to a preliminary analysis covering at least 10 blockchains, including Bitcoin, Ethereum, Solana and Tron.

Mercado Bitcoin has not confirmed the $40 million figure and has not said how attackers gained access to its systems. In a statement posted on X, the exchange said it "identified and quickly contained a security incident in one of our systems early this morning" and that deposits and withdrawals were suspended "as a preventive protection measure." The company said no customer funds were lost and no data was leaked.

USDT is a dollar-pegged stablecoin, and Tether can blacklist addresses holding the token to prevent the funds from moving. A freeze does not by itself return the assets to their owner, and neither Tether nor Mercado Bitcoin has said how the blocked USDT might be recovered.

In a follow-up post, the exchange published destination addresses it had identified on five networks: EVM-compatible chains, Bitcoin, Solana, Stellar and Tron. It said the addresses were released solely so that others could identify and track the funds on-chain. The EVM address listed was 0xe485e7A70b1131216Cb47CA4555c4Bbb2C742478. The disclosure did not assign a dollar value to each destination or specify how much of the affected assets sat on each network, and Ardoino's announcement did not allocate the frozen USDT among the published addresses.

Note: Mercado Bitcoin has not confirmed the $40 million outflow estimate, and the flagged transfers and the Tether freeze measure different things, so neither figure represents a final recoverable total.

The breach at Mercado Bitcoin comes days after hackers drained more than $6 billion from Binance on October 29, a theft the FBI attributed to North Korea's TraderTraitor group. Binance has since reopened withdrawals and said it replenished 95% of the affected assets. Mercado Bitcoin has not linked the two incidents and has not identified who is behind its own.

The timing puts a fresh spotlight on operational security at centralized exchanges in Latin America's largest market. Hypernative had already been working with Brazil's financial sector: the country's central bank developed a real-time crypto threat monitoring and alert-sharing system with the firm, and Mercado Bitcoin and Foxbit were among the exchanges named as participants in its planned integration. The project was designed to distribute warnings between banks and crypto companies when suspicious funds moved through the financial system, and testing had been completed. Mercado Bitcoin's statements did not identify which alert-sharing infrastructure was used during this incident.

Tether has positioned freezes as a way to stop the further movement of funds tied to suspected unlawful activity. In an April 23 announcement, the issuer said it helped US authorities block $344 million USDT across two addresses after receiving information alleged unlawful conduct. At the time, it said it worked with more than 340 law enforcement agencies in 65 countries and had cooperated in more than 1,200 cases tied to US law enforcement.

For traders, the immediate effect is a halt on moving funds into or out of Mercado Bitcoin. The exchange said its teams were tracking assets and coordinating with the relevant authorities, and that it would issue further updates through official channels. It has not given a date for resuming deposits and withdrawals.