Tether, the world’s largest stablecoin issuer, has taken action against illegal activities by freezing $5.2 million worth of its stablecoin USDT. The frozen funds were discovered in 12 Ethereum wallets that were identified as “USDT Banned Address” due to their involvement in phishing scams. SlowMist, an on-chain analytics firm, revealed that these wallets were being used to launder money from such scams.
This incident is not the first time Tether has taken action against illicit activities. Since its inception, the company has frozen over $1.3 billion in assets linked to hacks, exploits, and scams. Among these frozen assets, around $1.6 million was related to terrorist financing.
Tether has been actively monitoring and blacklisting suspicious Ethereum addresses. In January 2022, the company added three addresses holding over $150 million worth of USDT to its blacklist. Then, in October 2022, Tether froze $8.2 million in USDT and blacklisted 215 Ethereum-based USDT addresses.
Over the years, Tether has frozen more than $360 million in assets. In October 2023, the stablecoin issuer blocked $817,000 in USDT associated with terrorist activities in Ukraine and Israel. A month later, it froze $225 million in USDT connected to romance scammers.
To combat crypto-related crimes, Tether has collaborated with 24 law enforcement agencies across 40 countries. The company has worked on 198 requests from these agencies in the past year and 339 requests in the last three years, leading to the blocking of suspicious wallets.
Tether has also implemented secondary market controls to freeze any activity associated with individuals or entities listed on the United States Office of Foreign Assets Control Specially Designated Nationals list. This list includes companies and individuals controlled or owned by sanctioned countries.
Thanks to the use of decentralized ledger technology, crypto firms like Tether can monitor transactions on the blockchain. Additionally, the centralized nature of stablecoins enables issuers to freeze assets involved in illegal activities when requested by law enforcement agencies.
Cointelegraph reached out to Tether for further information on the banned addresses and their connection to phishing scams but did not receive a response at the time of publication.
Overall, law enforcement agencies in the United States are intensifying their efforts to combat crypto-related crimes, signaling a growing focus on the regulation and security of the cryptocurrency industry.