Comment by mcintyre1994
6 hours ago
Because if they permanently freeze 2 billion in a wallet, that Tether can never move or cash out, so their liabilities go down 2 billion. They can mint an equivalent amount to a non-frozen wallet without affecting their reserve ratio.
And yes they can print money, you have to trust their reserves that are off chain.
To be clear: There is no permanently frozen guarantee. Tether can and has unfrozen (called removeBlackList)addresses before. All of this is just a public database fully controlled by Tether Limited.