Tether has frozen $1.6 million in USDT tied to terrorism financing operations in Gaza, collaborating with the U.S. Department of Justice as part of a broader $2 million civil forfeiture case targeting funds supporting terrorist groups. The action targeted wallets linked to Gaza-based financial network BuyCash, with Tether identifying and restricting secondary-market wallets to aid asset recovery.
This marks Tether's latest enforcement effort, having now frozen over $2.9 billion in USDT connected to illicit activities across more than 5,000 blocked wallets. The company collaborates with 275+ law enforcement agencies across 59 jurisdictions, including recent cases like $23 million tied to sanctioned Russian exchange Garantex and $9 million from the Bybit hack.
CEO Paolo Ardoino emphasized blockchain's transparency as a crime-fighting advantage, noting USDT transactions are publicly traceable, enabling real-time intervention. The DOJ's scrutiny highlights growing regulatory focus on crypto's role in illicit finance, though critics warn about potential overreach impacting legitimate users.
Concurrently, Tether plans a U.S. market return under the newly signed GENIUS Act, developing a regulated, institutional-grade stablecoin for payments and interbank settlements. The firm is in talks with auditors and considering enhanced disclosures to meet U.S. standards, signaling a strategic compliance shift after past regulatory clashes.