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“Cryptocurrency transactions are not anonymous; they are the most traceable and trackable assets,” Tether CEO Paolo Ardoino said in April.
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The T3 Financial Crimes Unit (FCU), spearheaded by stablecoin issuer Tether, the Tron network and TRM Labs, collectively froze $126 million in USDt (USDT) since the inception of the FCU in August 2024.
The FCU works with law enforcement agencies across the world to freeze illicit transactions; it monitored approximately $3 billion in USDt transaction volume in 2024.
According to the group, money laundering accounted for nearly half of the frozen funds, at $56 million. The second largest category of frozen assets was $36 million in funds used in investment scams.
Despite the potential of returning stolen assets to victims of scams and deterring violent crime, asset freezes and financial surveillance have become controversial topics in the crypto community.
Decentralization and privacy maximalists argue that centrally managed cryptocurrencies pose a significant threat to self-autonomy and create the potential for financial censorship by governments and large corporations.
Breakdown of the USDT seized by the T3 Financial Crime Unit. Source: T3 Financial Crime Unit
Related: Brazil’s self-custodial stablecoin ban to catalyze decentralization
Tether’s history of freezing USDt accounts
Tether froze $8.2 million in USDt on the Ethereum network in October 2022. At the time, the stablecoin issuer did not provide a reason for the action and had frozen 215 USDt addresses on Ethereum that year.
The total amount of USDt blacklisted by the company in 2022 totaled more than $360 million.
In October 2023, the stablecoin issuer froze approximately $873,000 in USDt allegedly tied to terrorist activity in Ukraine and Israel — bringing the total amount of USDT frozen by the company to $835 million.
Tether cooperated in an investigation led by the US Department of Justice into a Southeast Asian human trafficking syndicate in November 2023.
As part of the investigation, Tether froze $225 million in stablecoins linked to the group reportedly acquired through “pig butchering” scams.
This relationship-building scheme aims to establish longstanding trust with a victim to steal their funds at a later date.
In April 2024, Tether also vowed to freeze Venezuelan assets to enforce the US Office of Foreign Asset Control’s sanctions on the South American country.
The threat came after reports emerged that Venezuela’s state-owned oil company Petroleos de Venezuela (PDVSA) used stablecoins to finance oil trading — bypassing US sanctions.
Magazine: Bitcoin payments are being undermined by centralized stablecoins
This article first appeared at Cointelegraph.com News
