On Thursday, Tether, the company behind the world's largest stablecoin, announced that it has frozen $344 million worth of USDT tokens in two wallets on the Tron blockchain, in response to requests from US authorities. The action was taken after the addresses were flagged for alleged links to illicit activities, preventing any further movement of the funds. According to blockchain analytics firm AMLbot, the addresses appeared in scam-related documents and posts, although the company did not disclose the nature of the activity or the identities of the wallet owners. This move comes as the debate surrounding the role of stablecoin issuers in preventing illegal money transfers gains momentum.
The Financial Action Task Force has recently warned that stablecoins are increasingly being used for illicit transactions, including sanctions evasion and money laundering. The issue has been highlighted by the recent $285 million exploit of Drift Protocol, where attackers moved hundreds of millions of USDC stablecoin across chains.
Tether has stated that it collaborates with law enforcement when wallets are linked to sanctions evasion or criminal networks, and has supported over 2,300 cases globally across 340 agencies in 65 countries. The company is also expanding its presence in the US market, having launched the USAT token in compliance with federal stablecoin regulation, in partnership with federally regulated crypto bank Anchorage Digital. Furthermore, Tether is preparing for a full audit of its reserves for the first time, aiming to enhance transparency and meet stricter regulatory expectations for stablecoins.