2024-05-15
Tether, the largest stablecoin issuer worldwide, has taken significant measures to combat illicit activities by freezing over $1 billion worth of assets associated with illegal practices.
Since its launch, Tether has been responsive to requests from law enforcement agencies, resulting in the freezing of various funds.
For instance, on May 14, Tether froze $5.2 million of its stablecoin Tether, which was connected to phishing scams.
These funds were located in 12 Ethereum wallets labeled as "USDT Banned Address." The addresses in question were reportedly involved in money laundering related to phishing scams, as confirmed by SlowMist's chief security officer.
In addition to phishing scams, Tether has also frozen assets linked to hacks, exploits, and scams, totaling billions of dollars.
Tether's CEO, Paolo Ardoino, revealed that the company has blocked more than $1.3 billion since its inception. Notably, approximately $1.6 million of the frozen funds were associated with terrorist financing.
To further combat illicit activities, Tether has implemented a blacklist system.
In January 2022, the company added three Ethereum addresses holding over $150 million worth of USDT to its blacklist. Later, in October 2022, Tether froze $8.2 million in USDT on Ethereum and added 215 Ethereum-based USDT addresses to the blacklist.
Throughout its operations, Tether has actively collaborated with 24 law enforcement agencies across more than 40 countries.
The company has responded to 198 requests from law enforcement agencies in the past year and 339 requests over the last three years, resulting in the blocking of suspicious wallets.
Furthermore, Tether has taken steps to comply with international regulations by offering secondary market controls.
These controls enable the freezing of activities associated with individuals or companies listed on the United States Office of Foreign Assets Control Specially Designated Nationals list.
This list includes entities controlled or owned by sanctioned countries.
The use of decentralized ledger technology allows crypto firms like Tether to monitor on-chain transactions, while the centralized nature of stablecoins enables the freezing of assets connected to illicit activities upon the request of law enforcement agencies.
Blocksky, a publication, reached out to Tether for comments regarding the banned addresses and their association with phishing scams. However, Tether did not respond by the time of publication.
