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- Tether froze $4.2 billion in tokens linked to illicit activity.
- Most of the frozen assets occurred in the past three years.
- Authorities globally are tightening oversight on crypto crimes.
According to the report, El Salvador-based stablecoin issuer Tether has frozen about $4.2 billion of its crypto tokens due to links with illicit activity. The majority of these freezes occurred in the past three years. The company can block tokens in users’ wallets when requested by law enforcement.
This feature gives the government the power to stop transactions that involve fraud, terrorism, and other criminal activities. Tether is the largest stablecoin issuer in the world. Tether’s stablecoin, called USDT, has over $180 billion in circulation. Three years ago, the circulation was only $70 billion.
The increase in the circulation of USDT demonstrates the increase in the use of stablecoins in trade and digital finance. Recently, Tether assisted the U.S. Justice Department in freezing $61 million worth of its tokens. These tokens were part of a fraud scheme called “pig-butchering.” This type of fraud occurs when scammers target their victims through their relationships.
Tether Blocks Wallets Linked to Crime
In total, Tether’s frozen assets linked to illegal activity now amount to $4.2 billion, out of which $3.5 billion has been frozen since 2023. There have also been instances of action taken against wallets related to human trafficking.
In another instance, the Russian crypto exchange sanctioned for its involvement in Russian affairs, Garantex, has confirmed that Tether has frozen its funds.
Cryptocurrencies have always been a subject of concern for governments globally. Last year, the Financial Action Task Force (FATF) urged countries to take stronger action against illicit finance in cryptocurrencies.
Digital assets operate with less oversight compared to traditional systems, which makes them a prime choice for money laundering and fraud. Researchers have found that criminals have received at least $82 billion in cryptocurrencies last year.
Crypto Market Expands at Record Pace
This is a significant increase from $10 billion in 2020. The increase is partly because of the activities of the Chinese-speaking community. The increase also shows the challenges the authorities are facing in keeping up with the rise in crypto adoption.
The rise in the use of stablecoins is also a notable trend in the market. Stablecoins are popular because of their ability to offer a stable price in the market while allowing for speedy transactions. The moves of Tether show how stablecoins can help in the fight against risks in the market related to illicit activities.
As the rules in the market are becoming stricter, the stablecoins such as USDT may also attract more scrutiny. There is a need for companies and the authorities to work together in the fight against illicit activities in the market. The move by Tether is a clear indication of the trend in the crypto market.
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