Tether Takes Action: $5.2M in USDT Frozen Due to Phishing Links

Tether is continuing to monitor and punish illicit activities. On May 14, it identified and froze USDT worth $5.2 million in an effort to enforce strict network controls and combat money laundering.

The illicit funds were first flagged by blockchain tracking platform MisTrack. The frozen USDT were distributed across 12 Ethereum (ETH) wallets, flagged as “USDT Banned Addresses.” The funds were suspected to have been laundered from numerous phishing schemes.

Frozen USDT Indicates Tether’s Effort to Combat Illicit Activity

Tether’s proactive measures to combat illicit activities in the cryptocurrency industry have been highlighted by recent actions, showcasing the company’s commitment to preserving the integrity and security of the network.

In March 2024, Tether partnered with the US Department of Justice (DoJ) and the Federal Bureau of Investigation (FBI) to seize $1.4 million worth of USDT from a tech support scam network.

Tether’s vigilance extends to its monitoring of USDT addresses, with major actions taken to blacklist suspicious addresses.

The company blacklisted three Ethereum addresses holding more than $150 million in USDT in January 2022. This was followed by the freezing of $8.2 million in USDT on Ethereum in October 2022, with 215 Ethereum-based USDT addresses added to the blacklist.

Tether has been swift in responding to emerging threats. In late 2022, the USDT issuer froze over $360 million in assets linked to illicit activities and took action against USDT linked to terrorist activity in Ukraine and Israel, freezing $817,000 in October 2023.

Additionally, in November 2023, $225 million in USDT associated with romance scams was frozen.

Meanwhile, Tether has partnered with Chainalysis to develop monitoring and analysis tools to identify wallets that may pose risks or be associated with illicit or sanctioned addresses.

Frozen USDT Comes Amidst Potential US Government Scrutiny

Tether’s recent freezing of USDT follows a UN report identifying USDT as the preferred cryptocurrency for money laundering, sparking speculation of a potential US government investigation.

Ripple CEO Brad Garlinghouse added fuel to the fire by suggesting that the US government is indeed targeting Tether, the world’s largest stablecoin issuer.

Speaking on the World Class podcast, Garlinghouse stated, “The U.S. government is going after Tether, that is clear to me,” expressing uncertainty about the implications of regulatory action against Tether despite its significant role in the cryptocurrency ecosystem.

These remarks drew a sharp response from Tether CEO Paolo Ardoino, who criticized Garlinghouse as an “uninformed CEO.”

Ardoino highlighted that Ripple itself is under SEC investigation and insinuated that Garlinghouse’s comments were driven by Ripple’s upcoming stablecoin, which could compete with USDT.

He also highlighted Tether’s collaboration with law enforcement agencies to combat illicit activities. The company has worked with 24 agencies across more than 40 countries, responding to 198 requests to block wallets in the last 12 months and 339 requests in the last three years.

These collaborations have been instrumental in identifying and mitigating risks associated with illicit activities involving USDT.