Tether has frozen $4.2 billion in USDt tokens linked to crime since 2023, aiding law enforcement in fraud and money-laundering cases.
Tether Freezes $4.2 Billion in USDt Tokens Linked to Crime
Stablecoin issuer Tether has reportedly taken significant action, freezing approximately $4.2 billion worth of its USDt tokens over the past three years due to suspected criminal activity. Most notably, this action began intensifying since 2023 as regulators and law enforcement agencies increased scrutiny on crypto-related fraud and sanctions evasion.
Largest Stablecoin, Tether, Assists in Seizures
Tether has demonstrated its role in assisting authorities by freezing nearly $61 million in USDt tokens associated with "pig-butchering" scams. This practice involves criminals building false relationships to persuade victims into sending money. Additionally, the company collaborated with Turkish officials to freeze around $544 million tied to alleged illegal online betting and money-laundering operations.
Widespread Freeze of Suspected Criminal Addresses
Blockchain analytics firm Elliptic reports that Tether and Circle have collectively blacklisted about 5,700 wallets holding roughly $2.5 billion since late 2025. Approximately three-quarters of these addresses contained USDt when they were frozen, highlighting the scale of Tether’s anti-crime efforts.
USDt Supply Declines Reflect Tightened Liquidity
Tether announced that its USDt stablecoin is experiencing a significant supply drop in February, with approximately $1.5 billion removed from circulation after a previous decline of $1.2 billion in January. This trend mirrors the aftermath of the FTX collapse in late 2022 and may indicate tighter liquidity within crypto markets.
Market Cap Declines as USDt Supply Shrinks
The market cap for Tether’s USDt (USDT) has seen a notable decrease over the past month, according to CoinMarketCap data. While Tether attributes this change primarily to short-term distribution adjustments rather than reduced demand, it mirrors similar reductions in other stablecoins like USDC during the same period.
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This article provides an overview of Tether's actions and their implications for the crypto market, highlighting both regulatory compliance efforts and potential market dynamics.
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