Tether freezes $344M in USDT as regulators lean on stablecoin choke points
Tether says it has frozen more than $344 million in USDT after working with the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and other law enforcement agencies to target wallets allegedly used for sanctions evasion and large-scale “pig‑butchering” fraud operations. The move underscores how dollar‑pegged stablecoins have become both preferred rails for some criminal networks and a convenient enforcement lever for authorities.
What happened
- Tether reports the freezes were coordinated with OFAC and multiple law enforcement bodies and add to what the company has described as billions of dollars in tokens frozen or seized in crime‑linked cases.
- CEO Paolo Ardoino said, “USDT is by no means a safe haven for illegal activities,” noting Tether’s traceability and controls. He added the firm has worked with “over 230 law enforcement agencies in over 50 nations” and routinely freezes funds tied to illegal activity even before final court orders in many instances.
Policy and precedent
- Tether has increasingly aligned its wallet‑freezing policy with OFAC’s Specially Designated Nationals (SDN) list, blocking addresses tied to sanctioned individuals, terrorism financing and high‑risk jurisdictions.
- That shift followed reports that Venezuela’s state oil company PDVSA used USDT to sidestep U.S. sanctions, prompting Tether to commit to blocking payments that facilitate sanctions evasion.
Enforcement use cases
- U.S. authorities have relied on Tether’s freezing capability in several high‑profile crackdowns on “pig‑butchering” scams, where victims are groomed and then convinced to transfer life savings into fake crypto investments.
- In February, the U.S. Attorney’s Office for the Eastern District of North Carolina announced the seizure of more than $61 million in USDT tied to such schemes; Tether assisted the DOJ and Homeland Security Investigations in tracing and transferring the funds.
- In a prior civil forfeiture, the DOJ sought roughly $225 million in USDT routed through exchange OKX — described as the largest U.S. crypto seizure linked to confidence scams — with authorities acknowledging Tether’s support.
Wider picture and market snapshot
- As of April 23, USDT trades at about $1.00 and has a market capitalization near $188 billion, making it the third‑largest crypto and the dominant dollar stablecoin by volume.
- Reuters recently reported Tether has frozen roughly $4.2 billion in tokens linked to illicit activity, with about $3.5 billion of that frozen since 2023.
- Chainalysis and TRM Labs continue to document significant use of USDT in cross‑border sanctions evasion and pig‑butchering networks — highlighting the coin’s dual role as an operational tool for criminals and a focal point for regulators.
Regulatory implications
- U.S. regulators are increasingly treating large stablecoin issuers as centralized choke points; the U.S. Treasury has reflected that dynamic in proposed anti‑money‑laundering rules for “permitted payment stablecoin issuers.”
- The tension is clear: freezing capability gives authorities a powerful compliance tool, but it also reinforces the centralized control of assets that many crypto proponents say should be decentralized.
Further reading
For more on enforcement cooperation around USDT and recent crackdowns, see our stories on the $47 million pig‑butchering operation, OFAC‑focused wallet freezes, and broader U.S. sanctions actions in crypto. Live market data for Tether is available on crypto.news’ Tether price page.
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