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Tether froze more than $340 million in USDT after direct requests from US law enforcement, renewing scrutiny over stablecoin issuers’ role in crypto crime investigations. The move came as April’s wave of DeFi hacks pushed the industry back into a familiar debate over stolen funds, compliance, and blockchain transparency. Should stablecoin companies act faster when stolen assets move through their systems?
The freeze targeted two wallet addresses that Tether said had links to unlawful conduct. The company did not identify the account controllers or describe the suspected activity.
Tether said it coordinates freezes when credible links emerge to sanctioned entities, criminal networks, or other illegal activity. Its policy also follows OFAC guidance on the Specially Designated Nationals list.
The company said it works with more than 340 law enforcement agencies across 65 countries. That cooperation has supported more than 2,300 cases worldwide, including over 1,200 tied to US authorities.
Tether said its enforcement work has helped freeze more than $4.4 billion in assets. That figure includes more than $2.1 billion connected to US authorities.
The company framed public blockchains as a key tool for investigators and issuers. Transactions leave visible trails, which allow wallets to be flagged before funds move further.
Paolo Ardoino, Tether’s chief executive, said USDT is not a safe haven for illicit activity. He said Tether acts when credible ties to criminal networks or sanctioned entities appear.
Ardoino also said recent events show what happens when platforms fail to act quickly. According to him, delays expose users, weaken enforcement, and damage trust.
Also Read: Tether Freezes US$4.2B in USDT as Crime Crackdown Grows
The latest freeze also comes as Circle, the issuer of USDC, faces criticism over its response to illicit flows. The pressure grew after hackers drained nearly $300 million in USDC from Drift Protocol on April 1.
Blockchain investigators claimed Circle did not move fast enough as attackers tried to shift the funds. Crypto forensics researcher ZachXBT also published 15 cases where he said Circle took minimal action. A lawsuit from a former Drift user alleges Circle did nothing while attackers worked to offload the stolen assets. Circle’s response was not included in the provided account.
Tether, by contrast, said its approach combines blockchain transparency, real-time monitoring, and direct coordination with law enforcement. The company said that the structure helps stop funds before they move.
The freeze also drew attention because a US official told CNN that the government had information linking the currency to Iran. The official cited blockchain analytics work. According to the official, investigators observed material links to the Iranian regime. Those links included confirmed transactions with Iranian exchanges and intermediary wallets.
The official also said some intermediary addresses interacted with wallets associated with the Central Bank of Iran. The provided account did not name the wallet owners.
Tether’s latest action fits a broader record of cooperation with US enforcement agencies. The Department of Justice previously acknowledged Tether’s support in cases involving nearly $61 million and about $225 million tied to pig butchering fraud.
Tether’s $340 million USDT freeze shows how stablecoin issuers are becoming central to crypto enforcement. The action, requested by US authorities, renewed debate over DeFi hacks, blockchain tracking, and issuer responsibility. The takeaway is clear: illicit crypto flows face growing scrutiny as enforcement coordination expands.
