Recently, a joint effort by Tether, the Tron network, and TRM Labs resulted in the freezing of $126 million in USDT. This action was part of the activities undertaken by the T3 Financial Crimes Unit (FCU) since its establishment in August 2024. The FCU collaborates with global law enforcement agencies to track and block fraudulent cryptocurrency transactions. In 2024 alone, the unit monitored around $3 billion in USDT transactions.
The funds seized included $56 million linked to money laundering and $36 million involved in investment scams. Despite the potential benefits of recovering funds for scam victims and deterring crime, such asset freezes and financial oversight remain contentious within the crypto community. Critics argue that centralized management of cryptocurrencies undermines decentralization and raises the risk of financial censorship by governments and large entities.
Historically, Tether has regularly engaged in account freezes. In October 2022, it froze $8.2 million in USDT on the Ethereum network without specifying a reason, culminating in over $360 million in blacklisted USDT addresses for that year. Similarly, by October 2023, Tether had frozen an additional $873,000 in USDT alleged to be associated with terrorist activities in Ukraine and Israel, bringing the total frozen to $835 million.
Tether has also collaborated with the US Department of Justice in investigations. In November 2023, the company froze $225 million in stablecoins linked to a Southeast Asian human trafficking syndicate, allegedly accumulated through “pig butchering” scams, which aim to deceive victims by fostering trust before eventually defrauding them. In April 2024, Tether announced its intention to freeze Venezuelan assets as part of enforcing US sanctions, following reports of Venezuela’s state oil company using stablecoins to circumvent these sanctions.
