Tether Freezes $225 Million in USDT Linked To Global Romance Scam

Tether, the world’s largest stablecoin issuer, froze $225 million worth of its dollar-pegged USDT tokens connected to a global “pig butchering” romance scam, the company announced on Monday.

The freeze marks the largest in the company’s history, and applied to otherwise “external self-custodied wallets.”

• The action followed a joint investigation with crypto exchange OKX done in collaboration with the U.S. Department of Justice (DOJ), and leveraged tools provided by blockchain analysis firm Chainalysis.
• Following the investigation, the DOJ received alerts about the movement of illicit funds on-chain, prompting the U.S. Secret Service to request a freeze. Tether “voluntarily” and “proactively” complied with the request.

• “We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry,” wrote Tether CEO Paolo Ardoino in a statement.

• Tether provided no details about the scam or frozen wallets but said that such wallets are on the secondary market and not direct customers of the issuer.
• Any lawful wallets mistakenly captured by the freeze will be unfrozen in collaboration with law enforcement and the individuals affected, Tether stated.
• Tether announced last month that it had frozen $873,000 worth of tokens linked to terrorism in Ukraine and Israel. It also froze $20 million tied to a phishing scam in August, and another $1.7 million stolen during the Yearn Finance exploit in February 2021.
• Nevertheless, political pressure has begun mounting on the company to address flaws in its anti-money laundering measures that may be abetting financial crime – even from crypto-supportive congresspeople.
• Tether’s market cap continues to mark new all-time highs this month, now reaching over $87 billion.