In a statement released Thursday, Tether, the issuer of the largest stablecoin globally, announced it has immobilized $344 million worth of USDT tokens in two wallets on the Tron blockchain following requests from U.S. authorities. The company disclosed this action was taken due to concerns over potential links between these addresses and illegal activities, as mentioned in a blog post.
The exact nature of the illicit activity or wallet ownership remains unspecified by Tether. However, AMLBots, a firm specializing in blockchain analytics, noted that these addresses were identified within scam-related documents and discussions. This freeze comes amid heightened scrutiny over stablecoin issuers’ responsibilities to curb funds associated with unlawful money transfers.
The Financial Action Task Force has recently cautioned about the growing use of stablecoins for illicit purposes, including evading sanctions and money laundering. While public blockchains facilitate transaction tracing, issuers like Tether possess the authority to freeze assets under certain circumstances.
This issue gained prominence following a recent $285 million breach at Drift Protocol, where attackers transferred large sums of USDC across various blockchain networks. Critics suggested that Circle (CRCL), the issuer of USDC, could have more promptly frozen assets to minimize losses. The company responded by stating it only acts when legally mandated or requested by law enforcement.
Tether has stated its collaboration with authorities in cases involving sanctions evasion and criminal enterprises, supporting over 2,300 instances globally through partnerships with 340 agencies across 65 nations.