$5.2 Million Frozen To Stop Phishing Scandals In Their Tracks

To combat illicit financial activities, Tether, the entity behind the world’s largest stablecoin by market capitalization, has frozen approximately 5.2 million USDT.

The crypto tracking and compliance platform MistTrack detailed this action, which targeted 12 Ethereum addresses identified as part of phishing operations.

Details Of The Freeze

The affected addresses used in the phishing were notably tagged as “USDT Banned Address,” indicating their involvement in potential money laundering activities commonly associated with phishing groups.

Phishing groups often transfer their ill-gotten gains to secondary platforms and utilize cryptocurrency mixers to obscure the origins of their funds.

⚠️MistTrack Alert🧐

Just now, #Tether froze ~5.2 million $USDT on 12 addresses. These addresses are associated with addresses tagged as “USDT Banned Address” by #MistTrack.https://t.co/OzPQkfCehS pic.twitter.com/msAShbbl73

— MistTrack🕵️ (@MistTrack_io) May 14, 2024

Tether’s recent freeze is part of a broader strategy to undermine these illicit activities by cutting off access to crucial financial resources.

This freeze is not an isolated incident. Late last year, Tether collaborated with crypto asset trading platform OKX to implement the most extensive freeze of USDT. This action involved freezing over 225 million USDT across 37 wallets, which were connected to a human trafficking network.

This action underscored Tether’s “current dedication” to using its technological capabilities to support global law enforcement in addressing and mitigating criminal activities.

Paolo Ardoino, Tether’s newly appointed CEO, reinforced this commitment, stating, “Tether remains steadfast in its support of law enforcement efforts and in aiding victims in their recovery.”

He emphasized the company’s zero tolerance for the misuse of USDT or any cryptocurrency for illicit purposes, underscoring their “dedication” to working alongside global law enforcement to ensure the integrity of the digital asset ecosystem.

The Larger Picture: Tether’s Role In Combating Illicit Crypto Flows

Despite these efforts, Tether’s ubiquity within the cryptocurrency market has made it a frequent tool in illicit transactions. A report by blockchain analytics firm TRM Labs highlighted that the USDT issuer accounted for $19.3 billion of illegal transaction volume in 2023, a decrease from $24.7 billion the previous year.

TRM’s analysis pointed out that USDT on the Tron blockchain, which hosts a significant portion of the total volume of stablecoin issuers, is the preferred currency for terrorist financing entities.

This blockchain saw a 125% increase in terror-financing-related addresses receiving USDT, indicating the challenges and complexities in curtailing these flows.

Meanwhile, the global regulatory environment continues to scrutinize Tether’s operations. A report by the Financial Times highlighted the United Nations Office on Drugs and Crime’s identification of Tether as a tool increasingly used by money launderers and fraudsters in Southeast Asia.

In response, Ardoino criticized the report, suggesting that it was written with little understanding of the facts and was biased towards traditional finance, which he believes is struggling to adapt to the successes of new technologies.

Featured image from Unsplash, Chart from TradingView