Tether, a stablecoin issuer based in El Salvador, has reported freezing approximately $4.2 billion in cryptocurrency tokens due to their involvement in illicit activities, with the majority of these freezes occurring over the past three years. This move comes as global regulators intensify efforts to combat cryptocurrency-related crimes.
As the world’s largest stablecoin provider, Tether's dollar-pegged tokens now have a circulation exceeding $180 billion, up from around $70 billion three years ago. The company has the capability to remotely freeze tokens in users' crypto wallets upon requests from law enforcement agencies.
This week, Tether disclosed that it assisted the U.S. Department of Justice in freezing nearly $61 million worth of Tether (USDT) tied to "pig butchering" scams—a type of fraud in which criminals build emotional relationships with victims before defrauding them.
A Tether spokesperson stated via email on Thursday evening that the total value of assets frozen by the company in connection with illegal activities has now reached $4.2 billion, with $3.5 billion of that amount frozen since 2023.
Tether has previously indicated that it has blocked wallets associated with human trafficking, as well as "terrorism and warfare activities" in Israel and Ukraine. Last year, the sanctioned Russian cryptocurrency exchange Garantex claimed that Tether had frozen funds on its platform.
Regulators worldwide have long expressed concerns about the role of cryptocurrencies in illicit finance. Last year, the Financial Action Task Force (FATF) urged countries to take stronger action against illegal financial activities in cryptocurrency markets, which are generally subject to lighter regulation than traditional financial markets.
In January, blockchain researchers reported that money launderers received at least $82 billion in cryptocurrency in the previous year, a significant increase from $10 billion in 2020, partly due to a rise in criminal activities in Chinese-speaking regions.
Stablecoins, which are primarily used for cryptocurrency trading, have experienced substantial growth in transaction volume in recent years.