Tether, the issuer of the world’s largest dollar pegged stablecoin, said it has frozen approximately 4.2 billion dollars worth of its USDT tokens over links to illicit activity, with the majority of those actions taking place over the past three years.
The company, which has more than 180 billion dollars of USDT in circulation, confirmed that around 3.5 billion dollars of the total frozen amount has been blocked since 2023. Tether stated that it has cooperated with law enforcement agencies worldwide to restrict access to wallets connected to suspected criminal conduct.
Earlier this week, Tether said it assisted the US Department of Justice in freezing nearly 61 million dollars in USDT associated with so called pig butchering schemes. These scams typically involve fraudsters building personal relationships with victims before persuading them to invest in fraudulent crypto opportunities. Authorities have identified pig butchering as one of the fastest growing forms of online financial fraud in recent years.
Tether’s technology allows it to freeze tokens held in specific crypto wallets when presented with legitimate requests from law enforcement. Unlike decentralized cryptocurrencies such as Bitcoin, stablecoin issuers can exert control over token contracts, enabling them to block transfers or render certain balances unusable.
The company has previously reported freezing wallets connected to human trafficking operations as well as activities linked to terrorism and warfare. Sanctioned entities have also been affected. In 2024, Russian crypto exchange Garantex disclosed that Tether had blocked funds on its platform following compliance measures.
Global regulators have increasingly scrutinized the role of digital assets in illicit finance. The Financial Action Task Force has urged countries to strengthen oversight of crypto markets, warning that inconsistent regulation creates vulnerabilities for money laundering and sanctions evasion.
Blockchain analytics firms estimate that money laundering activity using cryptocurrencies reached at least 82 billion dollars last year, up significantly from levels seen in 2020. Researchers attribute part of the increase to organized networks operating across multiple jurisdictions, including Chinese speaking fraud groups targeting international victims.
Stablecoins play a central role in crypto trading and cross border transactions due to their price stability and liquidity. As their usage expands, enforcement actions involving stablecoins have also grown. Tether’s latest figures highlight how major issuers are increasingly positioned as intermediaries in global financial crime investigations.
With stablecoin market capitalization surpassing hundreds of billions of dollars, regulatory expectations around compliance, transparency and cooperation with authorities continue to rise. The ability of issuers to freeze tokens remains a key point in discussions about balancing financial innovation with safeguards against illicit activity.
