- Tether froze over $225 million worth of USDT tokens.
- Freeze resulted from collaboration with U.S. law enforcement.
- DOJ used blockchain analysis tools from Chainalysis in a months-long investigation.
Stablecoin firm Tether froze over $225 million worth of its USDT token following a U.S. investigation into an international human trafficking operation. The freeze represents the largest ever for a stablecoin and resulted from Tether’s collaboration with law enforcement.
The U.S. Department of Justice (DOJ) had been investigating the Southeast Asia-based syndicate for months using blockchain analysis tools from Chainalysis. Tether assisted by freezing the USDT after identifying wallets associated with the criminal group.
The illicit operation was connected to the “pig butchering” scam which reportedly cost U.S. citizens $3.3 billion last year through sophisticated fake investment schemes. Victims were persuaded to invest in fake platforms and then gradually coaxed into transferring funds that were stolen.
Seized USDT was held in self-custodied wallets
The seized USDT was held in self-custodied wallets rather than Tether customer accounts. Nonetheless, Tether moved to disable the tokens upon confirmation of illegal activity by the DOJ.
CEO Paolo Ardoino framed the freeze as an example of Tether’s commitment to cooperation with law enforcement and regulatory transparency. By proactively assisting investigations, the company aims to heighten safety in the wider crypto ecosystem.
Critics have long accused Tether of lax oversight in issuing new USDT, enabling potential illicit usage. But the firm maintains that it partners with regulators to monitor token flows and blacklist addresses linked to bad actors.