Stablecoin issuer Tether freezes approximately $4.2 billion in USDT, in coordination with the U.S. Department of Justice (DOJ) asset transfer and seizure actions. This large-scale freeze targets crypto wallets involved in “pig butchering” scams, money laundering, and illegal fund transfers over the past three years. In recent years, global regulatory agencies have intensified efforts to combat stablecoin fraud and money laundering activities. Tether’s cooperation with law enforcement is becoming increasingly close, demonstrating a strong commitment to curbing online financial crimes.
U.S. Department of Justice seizes $61 million worth of Tether linked to external wallet addresses
The U.S. District Attorney’s Office for the Eastern District of North Carolina announced the seizure of over $61 million in Tether. Investigators traced these funds to certain crypto addresses associated with money laundering activities. The case involves typical “pig butchering” scams, where criminals establish long-term trust or fake romantic relationships online with victims, then lure them into sophisticated fake trading platforms for investment. These platforms closely resemble legitimate exchanges and display fabricated high-profit data to entice victims to invest more. When victims attempt to withdraw funds, scammers often conduct secondary scams by claiming they need to pay taxes or fees.
U.S. Homeland Security tracks on-chain transactions to identify related wallets
Ellis Boyle, the North Carolina prosecutor, stated that through the U.S. Homeland Security Investigations (HSI) tip line, blockchain investigators analyzed the flow of funds starting from a victim’s report, ultimately locating and intercepting the criminal proceeds spread across multiple wallets.
Tether’s technical architecture allows law enforcement to remotely freeze tokens stored in specific crypto wallets upon request. A company spokesperson noted that out of the $4.2 billion frozen assets, up to $3.5 billion were frozen after 2023. These actions are not limited to individual cases but also include assets related to human trafficking and armed conflicts in Israel and Ukraine. Tether assists U.S. authorities in freezing assets involved in investment scams.
Research shows a significant increase in crypto money laundering activities, with Chinese community-related crimes growing most rapidly
The Financial Action Task Force (FATF) reports an upward trend in illegal financial activities in the crypto market. In 2023, crypto laundering funds reached $82 billion, surpassing the $10 billion in 2020, with notable growth in crimes related to Chinese communities.
FATF, established in 1989 by the G7 nations, develops international standards and promotes the implementation of laws, regulations, and operational measures to protect the financial system from abuse. Its goals include combating money laundering (AML), terrorist financing (CFT), and other threats to the global financial system.
Because stablecoins serve as liquidity pillars in crypto trading, their low volatility and high transfer efficiency make them preferred tools for money laundering. Last year, FATF urged governments to adopt stricter regulations to close regulatory gaps. Currently, entities like the sanctioned Russian crypto exchange Garantex are on international watchlists and subject to asset freezes. Law enforcement agencies worldwide are strengthening oversight of virtual asset service providers, requiring them to meet or exceed the AML standards of traditional financial institutions.
This article, “Tether cooperates with U.S. authorities to actively freeze USDT and combat ‘pig butchering’ money laundering crimes,” originally appeared on Chain News ABMedia.
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