The USDT smart contract maintains a denylist of accounts and the contract's designated admin key can add and remove entries to this list. So you may still "own" tokens after you're on the list, but every action your account tries to perform on these tokens will be denied by the contract.
It is not because of the cryptographic keys that Bitcoin is permissionless; that's just a technical solution. Instead, it's because valid PoW cannot be gatekept (but it could be attacked - at a cost) and valid transactions only depend on the spending constraints being honored (but it too could be attacked - at a long-term cost.) This means that as long as you can mine a block with a tiny device, currently that means a BitAxe or some entry level miner, and no valid spend will be rejected after it was mined, Bitcoin remains permissionless.
Most smart contracts on proof of stake chains have neither of these properties: the contracts nearly all have admin keys that can freeze any funds (or inflate the supply), and in order to produce a block, you need to already have bought in, inside the chain. Your keys and seed phrases are meaningless for transactional freedom, because you're being gatekept on 2 other layers.
The whole "you own your keys and therefore you're sovereign" on most of these chains and especially for stablecoins is therefore deceptive. Don't believe their lies, because they are simply trying to ride a Bitcoin solution while having tricks built in that aren't advertised.
The USDT smart contract maintains a denylist of accounts and the contract's designated admin key can add and remove entries to this list. So you may still "own" tokens after you're on the list, but every action your account tries to perform on these tokens will be denied by the contract.
It is not because of the cryptographic keys that Bitcoin is permissionless; that's just a technical solution. Instead, it's because valid PoW cannot be gatekept (but it could be attacked - at a cost) and valid transactions only depend on the spending constraints being honored (but it too could be attacked - at a long-term cost.) This means that as long as you can mine a block with a tiny device, currently that means a BitAxe or some entry level miner, and no valid spend will be rejected after it was mined, Bitcoin remains permissionless.
Most smart contracts on proof of stake chains have neither of these properties: the contracts nearly all have admin keys that can freeze any funds (or inflate the supply), and in order to produce a block, you need to already have bought in, inside the chain. Your keys and seed phrases are meaningless for transactional freedom, because you're being gatekept on 2 other layers.
The whole "you own your keys and therefore you're sovereign" on most of these chains and especially for stablecoins is therefore deceptive. Don't believe their lies, because they are simply trying to ride a Bitcoin solution while having tricks built in that aren't advertised.