Tether Freezes $4.2 Billion in USDT Linked to Criminal Activity

Highlights:

• Tether has confiscated $4.2 billion worth of USDT connected to scam activities.
• The stablecoin issuer has been confiscating assets since 2023.
• Tether noted that its actions were in line with directives from law enforcement agencies.

Stablecoin issuer Tether has frozen $4.2 billion worth of its USDT tokens. According to reports, the confiscated assets were linked to crypto-related crimes. Most of the funds were frozen three years ago, highlighting the company’s zero-tolerance policy against fraudulent activity. The company noted that it can easily block tokens in users’ wallets upon request from law enforcement agencies. 

For example, Tether recently froze roughly $61 million in USDT linked to a scam known as “pig-butchering.” In this kind of fraud setup, the scammers build a fake personal relationship with their victims over time before convincing them to invest in fraudulent crypto schemes. The action was in collaboration with the United States Department of  Justice. Tether confirmed the move, adding that the latest action pushed the total number of frozen USDT linked to illegal activity to its current level. Out of the total $4.2 billion frozen assets, $3.5 billion worth of USDT tokens have been blocked since 2023. 

Tether Freezes $4.2B in USDT as Fight Against Crypto Crimes Continues to Grow Stronger

In the past, Tether has frozen wallets linked to human trafficking and unlawful purchase of weapons. The stablecoin issuer has also blocked Garantex, a sanctioned Russian crypto exchange, from receiving funds since last year. As crypto continues to evolve, regulators worldwide have warned that many scammers are using digital assets to facilitate money laundering and other crimes.

Globally, regulators have warned countries to tighten oversight of crypto markets. Most of these markets usually face lighter rules than conventional finance. This makes crypto an ideal route for scammers to move funds. According to blockchain research firms, at least $82 billion worth of cryptocurrencies were stolen via money laundering in 2025. This figure was a significant increase from the $10 billion recorded in 2020. Researchers attributed the surge to the massive expansion recorded among Chinese-speaking criminal networks. 

Tether Reiterates Support for Stablecoins Despite Halting CNH₮’s Minting

On February 20, Tether announced that it is ending support for its offshore yuan stablecoin (CNH₮). The company cited low adoption and weak market demands as the main reasons for ending CNH₮’s support. Per an official press release, Tether always conducts regular assessments of all its products to identify assets that are underperforming and also to ensure they are safe and relevant. Tether emphasized that all its products must continue attracting considerable interest or risk being removed from the platform. 

Tether announced:

Despite ceasing support for CNH₮, Tether said it remains committed to supporting stablecoins and other crypto-related projects. Ending support for CNH₮ will allow the company to focus on other projects showing remarkable growth potential. The stablecoin issuer added, “We appreciate the support of the community and remain committed to responsible product stewardship and building financial infrastructure that is globally accessible. Together, we continue working toward a more sustainable and inclusive digital financial ecosystem.” 

What is Next?

Tether’s USDT is designed to hold a 1:1 value with the United States dollar. Currently, there are over $180 billion worth of USDT tokens in circulation. While confiscating USDT worth $4.2 billion might seem alarming, it aligns with global standards on safe digital asset usage. Hence, it should serve as a deterrent for future offenders. On the other hand, it will increase the public’s trust in the stablecoin platform.

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