Tether froze over $344M in USDT tied to sanctions evasion and pig-butchering scams, underscoring stablecoins’ role as both crime rails and regulatory choke points.
Summary
- Tether says it froze over $344 million in USDT linked to sanctions evasion and criminal networks in coordination with U.S. authorities.
- The move comes alongside U.S. law enforcement seizures of roughly $61 million and $225 million in USDT tied to “pig butchering” scams.
- CEO Paolo Ardoino insists USDT “is by no means a safe haven for illegal activities,” as regulators push stablecoin issuers to harden AML controls.
Tether has frozen more than $344 million in USDT in collaboration with the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and other law enforcement agencies, targeting wallets allegedly used for sanctions evasion and large-scale fraud schemes. The latest actions add to what Tether recently described as billions of dollars in tokens frozen or seized in crime-linked cases as regulators intensify scrutiny of dollar-pegged stablecoins.
In a statement, CEO Paolo Ardoino stressed that “USDT is by no means a safe haven for illegal activities,” arguing that the token’s traceability and Tether’s controls make it a poor tool for criminals. He said the firm has worked with “over 230 law enforcement agencies in over 50 nations” and routinely freezes funds “associated with illegal activities” before courts issue final orders.
OFAC pressure and pig-butchering crackdowns
According to Tether, the company has increasingly aligned its wallet-freezing policy with OFAC’s Specially Designated Nationals list, blocking addresses connected to sanctioned individuals, terrorism financing, and high-risk jurisdictions. Earlier policy updates followed reports that Venezuela’s state oil company PDVSA used USDT to bypass U.S. sanctions, prompting Tether to commit to blocking payments that help “evading sanctions.”
U.S. enforcement agencies have leaned on that capability in a series of high-profile “pig butchering” cases, where scammers cultivate relationships with victims before funneling their savings into fake crypto investments. In February, the U.S. Attorney’s Office for the Eastern District of North Carolina announced the seizure of over $61 million in USDT tied to such schemes, noting that Tether assisted the Department of Justice (DOJ) and Homeland Security Investigations in tracing and transferring the funds. In an earlier civil forfeiture case, the DOJ sought to seize roughly $225 million in USDT routed through exchange OKX, calling it the largest-ever U.S. seizure linked to crypto confidence scams, with authorities acknowledging support from Tether in the operation.
Stablecoins under growing regulatory spotlight
As of April 23, USDT trades at around $1.00 with a market capitalization close to $188 billion, making it the third-largest crypto asset and the dominant dollar stablecoin by volume. Despite its scale, public law enforcement cases increasingly portray Tether as a centralized chokepoint that regulators can use to freeze and re-route funds, a dynamic the U.S. Treasury highlighted in its proposed anti-money laundering rules for “permitted payment stablecoin issuers.”
That tension is unlikely to fade. A recent Reuters report noted that Tether has frozen roughly $4.2 billion in tokens linked to illicit activity, with about $3.5 billion locked since 2023 alone. At the same time, data firms like Chainalysis and TRM Labs continue to trace extensive use of USDT in cross-border sanctions evasion and pig-butchering networks, underscoring how the stablecoin has become both an operational tool for criminals and a regulatory lever for governments.
For more on enforcement collaboration around USDT, see this crypto.news story on a $47 million pig-butchering crackdown, this story on OFAC-focused wallet freezes, and this story on broader U.S. sanctions actions in crypto. Live USDT market data is available on crypto.news’ Tether price page.
