The El Salvador-based company, which has over $180 billion of its dollar-pegged tokens in circulation, can remotely freeze tokens held in users’ wallets at the request of law enforcement, News.Az reports, citing Reuters.
Tether recently assisted the U.S. Justice Department in freezing nearly $61 million in USDT linked to “pig-butchering” fraud, where scammers exploit victims through personal relationships.
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Of the total frozen, $3.5 billion has been frozen since 2023.
Tether has also blocked wallets connected to human trafficking, terrorism, and warfare in Israel and Ukraine. Sanctioned Russian crypto exchange Garantex reported last year that Tether froze funds on its platform.
Authorities worldwide have expressed concern about cryptocurrencies’ use in illicit finance. The Financial Action Task Force urged stronger actions last year to curb criminal activity in crypto markets, which are generally less regulated than traditional financial systems.
Researchers estimate that at least $82 billion in crypto was received by money launderers last year, up sharply from $10 billion in 2020, partly fueled by growth in Chinese-speaking networks.
With crypto trading volumes surging, stablecoins like Tether are now under intense scrutiny as regulators and law enforcement aim to prevent their use in fraud, crime, and money laundering.
