El Salvador-based stablecoin issuer Tether said it has frozen about $4.2 billion worth of its dollar-pegged USDT tokens linked to illicit activity, with the bulk of the freezes occurring in the past three years. USDT remains the world’s largest stablecoin, with more than $180 billion in circulation, up sharply from roughly $70 billion three years ago. The company has the technical ability to remotely freeze tokens held in users’ wallets when requested by authorities—a power that differentiates centrally issued stablecoins from decentralized cryptocurrencies such as Bitcoin.
This week, Tether said it assisted the U.S. Department of Justice in freezing nearly $61 million in USDT tied to so-called pig-butchering scams, a fraud where perpetrators cultivate personal relationships with victims before steering them to fraudulent crypto schemes. The actions lifted Tether’s cumulative frozen assets tied to illicit activity to $4.2 billion, of which about $3.5 billion has been frozen since 2023. The scale reflects both the rapid expansion of stablecoins and the increasing use of crypto in cross-border fraud and laundering schemes. Tether has previously blocked wallets connected to human trafficking networks and activities linked to terrorism and warfare in Israel and Ukraine. Sanctioned Russian crypto exchange Garantex also said last year that Tether had blocked funds on its platform.
With more than $180 billion of USDT in circulation, Tether’s enforcement actions illustrate that stablecoins are no longer peripheral instruments in digital finance. The company’s ability to freeze funds has become an increasingly visible enforcement tool as it positions itself as a responsible intermediary cooperating with authorities and blocking flagged wallets, rather than a passive conduit for illicit flows.
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