Tether (USDT) disclosed it has frozen approximately $4.2 billion in USDT over links to illicit activity - with $3.5 billion of that total blocked since 2023 - making it one of the largest cumulative enforcement disclosures by a private stablecoin issuer.
The announcement came days after the company helped the US Justice Department freeze nearly $61 million in USDT connected to pig-butchering fraud networks.
USDT's circulating supply now exceeds $180 billion, up from roughly $70 billion three years ago.
Unlike decentralized cryptocurrencies, Tether retains a technical kill switch: it can remotely freeze tokens held in any user's wallet when formally requested by law enforcement.
The company said it has applied that capability across cases involving human trafficking, sanctions evasion, and what it described as "terrorism and warfare" activity linked to conflicts in Israel and Ukraine. Sanctioned Russian exchange Garantex previously confirmed that Tether had frozen funds on its platform.
Enforcement Record
The DOJ and Homeland Security Investigations publicly credited Tether's cooperation in this week's pig-butchering seizure in a Feb. 24 press release.
Prior joint actions include a June 2025 civil forfeiture complaint targeting $225 million in USDT connected to pig-butchering schemes, conducted with the DOJ and OKX; a July 2025 forfeiture of $1.6 million tied to alleged terror financing in Gaza; a March 2025 US Secret Service freeze of $23 million in USDT linked to Garantex; and a November 2025 action with Royal Thai Police recovering $12 million from a transnational scam network.
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The Centralization Trade-Off
Tether's freeze capability gives regulators a control mechanism that does not exist with decentralized assets - but it also concentrates significant power in a single private company.
The Financial Action Task Force last year called on countries to strengthen crypto market oversight, and blockchain researchers estimated in January that money launderers received at least $82 billion in cryptocurrency in 2025, up from $10 billion in 2020.
Whether voluntary cooperation is sufficient or formal supervisory regimes are needed remains an open regulatory question as USDT's footprint continues to expand.
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