Tether Company Says It Has Frozen $4.2 Billion in Stablecoins Linked to Criminal Activity
Tether, a stablecoin issuer based in El Salvador, says it has frozen approximately $4.2 billion in crypto tokens due to involvement in illegal activities, with most of the freezing actions occurring in the past three years. Global regulators are currently cracking down on crimes related to cryptocurrencies.
The world’s largest stablecoin company, whose dollar-pegged tokens have a circulation exceeding $180 billion – up from around $700 billion three years ago – can remotely freeze tokens in users’ crypto wallets when requested by law enforcement.
Tether said this week it assisted the U.S. Department of Justice in freezing nearly $61 million in Tether (USDT) linked to “pig butchering” scams. Pig butchering is a type of fraud where scammers build emotional relationships with victims before defrauding them.
A Tether spokesperson said via email late Thursday that the company has now frozen a total of $4.2 billion in assets linked to illegal activity, with $3.5 billion frozen since 2023.
Tether has previously said it has blocked wallets linked to human trafficking, as well as “terrorism and war activities” within Israel and Ukraine. Sanctioned Russian crypto exchange Garantex said last year that Tether had frozen funds on its platform.
Regulators worldwide have long been concerned about the role of cryptocurrencies in illicit finance. The Financial Action Task Force (FATF) called last year for countries to take stronger action to combat illegal finance in the crypto market – which is generally less regulated than mainstream financial markets.
Blockchain researchers said in January that money launderers obtained at least $82 billion in crypto last year, far up from $100 billion in 2020, partly due to increased crime related to Chinese-speaking circles.
Stablecoins are primarily used for crypto trading and have seen a significant increase in trading volume in recent years.