Tether Takes Action: Blacklists Validator Address Linked to $25 Million MEV Bot Drain – Here’s What Happened

Author
Author
Ruholamin Haqshanas
About Author

Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

Last updated: 
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: Adobe

Tether, the company behind the world’s largest stablecoin, has blacklisted a validator address responsible for draining $25 million from Miner Extractable Value (MEV) bots. 

The validator exploited a bug in the MEV-boost relay to bypass MEV bots by attempting to execute a sandwich trade, which processes an order immediately before another trade and then right after it. 

Essentially, this process simultaneously front-runs and back-runs an originating transaction, on the condition that its verification status is still pending.

The validator, in this case, back-run the MEV’s transaction, leading to losses of nearly $25 million in various digital assets, making it the largest MEV exploit to date.

A validator is responsible for processing transactions and creating new blocks on the blockchain.

Blockchain explorer Etherscan has already flagged the address involved.

The attack has the potential to transform the MEV ecosystem because MEV extractors will wonder “which Ethereum validators are malicious,” former Ethereum Foundation member Hudson Jameson said in a tweet.

MEV (Maximal Extractable Value) bots have been profitable by leveraging information about transactions about to be executed, often using arbitrage to capitalize on price differences between exchanges. 

These bots front-run trades, purchasing currency slightly cheaper than other traders, which results in their practices being viewed as a form of “invisible” tax.

To date, 27 Ethereum-based projects joined forces to launch MEV Blocker, aiming to minimize the value extracted from traders by MEV bots.

Crypto Community Lash Out at Tether For Blacklisting the Drainer Wallet

Tether’s decision to blacklist the validator address has drawn criticism from the crypto community, with some arguing that it sets a “bad precedent” for regulatory and policy-related implications. 

By blacklisting the address, Tether effectively exercises its authority to censor transactions, which could be seen as a centralizing force in an ecosystem that is meant to promote decentralization. 

This raises concerns about the potential abuse of power by centralized entities, such as Tether, and the implications this might have on DeFi.

Fastlane co-founder Thogard said this was the “most concerning DeFi development of 2023.” He added:

“The bot ‘victims’ signed those transactions and sent them to the relay. They were executed. The exploit wasnt in DeFi. Tether’s block implies they have an opinion on eth’s consensus / social layer.”

Meanwhile, an on-chain sleuth who goes by the Twitter name ZachXBT said that the blacklisting by Tether could be the result of a court order.

On the other hand, some noted that Tether’s decision to blacklist the exploiter could be seen as a necessary security measure aimed at preventing bad actors from profiting off exploits and vulnerabilities in the DeFi ecosystem. 

Logo

Why Trust Cryptonews

2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors
editors
+ 66 More

Best Crypto ICOs

Discover trending tokens still in presale — early-stage picks with potential

Explore Our Tools

Smart tools made for everyday crypto users

Market Overview

  • 7d
  • 1m
  • 1y
Market Cap
$3,544,776,849,841
3.27
Trending Crypto

More Articles

Bitcoin News
Brazil’s Méliuz Announces Plans to Buy Another $26.5M Worth of Bitcoin
Tim Alper
Tim Alper
2025-05-21 23:30:00
Blockchain News
Lawmakers, Activists Rally to Protest Trump’s Meme Coin Event – Is Crypto Becoming a Political Flashpoint?
Hassan Shittu
Hassan Shittu
2025-05-21 23:27:28
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors