But Iran would have to have “addresses” where the tokens lived right?
Conceivably, circle or tether could just kill the addresses? I can’t imagine there’s much volume on liquid. And these would be beefy txs. But maybe I’m missing something
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No, Tether can’t kill those addresses once they’re in L-USDT. On Liquid, an observer can’t see UTXOs, balances of addresses, etc. They can’t scan Liquid to see who owns what in what amounts because Liquid has confidential transactions and confidential assets. Even if they could, the only thing Tether could do is cancel ALL future redemptions of L-USDT to USDT, leaving L-USDT permanently inside Liquid, which would function just fine but locked forever within Liquid.