Tether, the cryptocurrency company best known for issuing the world’s largest stablecoin, said Thursday that it has frozen $344 million worth of USDT tokens in two wallets on the Tron blockchain after receiving requests from US authorities.
The freeze was carried out after authorities flagged the addresses for alleged links to illicit activities, the company said in a blog post on Thursday. The action prevented further movement of funds.
The company did not specify the nature of the activity or who controlled the wallets. Blockchain analysis firm AMLbot said the addresses appeared in documents and publications related to scams.
The move comes as debate over the role and responsibility of stablecoin issuers in stopping funds linked to illegal money transfers is back in the spotlight. The Financial Action Task Force recently warned that stablecoins are increasingly being used for illicit transactions, including sanctions evasion and money laundering. Public blockchains allow transactions to be tracked, while issuers retain the ability to freeze assets under certain conditions.
The issue was highlighted this month following the $285 million Drift Protocol exploit, in which attackers moved hundreds of millions of USDC stablecoins and bridging funds across chains. Critics argued that Circle (CRCL), the issuer of USDC, could have acted faster to freeze assets and limit losses, while the company said it only takes such actions when legally required or at the request of authorities and authorities.
Tether said it works with law enforcement when wallets are linked to sanctions evasion or criminal networks, and has supported more than 2,300 cases globally across 340 agencies in 65 countries.
The company is also venturing deeper into the US market. Launched the federally compliant stablecoin USAT token, issued in partnership with federally regulated cryptobank Anchorage Digital, with the effort led by former White House crypto advisor Bo Hines.
Tether is also preparing for a full audit of its reserves for the first time, a long-promised step as the company seeks to improve transparency and align more closely with stricter regulatory expectations toward stablecoins.
UPDATE (April 23, 15:30 UTC): Adds context on Tether’s US expansion
