A new report from blockchain analytics firm AMLBot reveals a stark contrast in how the two largest stablecoin issuers, Tether and Circle, handle asset freezes linked to illicit activities between 2023 and 2025. Tether, the issuer of USDT, froze a staggering $3.3 billion worth of assets, blacklisting 7,268 wallet addresses. In sharp contrast, Circle, the issuer of USDC, froze only $109 million across 372 addresses.
Tether's proactive and aggressive approach involved close coordination with U.S. law enforcement, with over 2,800 of the freezes conducted in partnership with agencies. Notably, Tether employed a "freeze + burn + reissue" strategy, permanently destroying illicit tokens and reissuing new ones to return value to victims or authorities. The report highlights that over 53% of the frozen USDT was on the Tron blockchain, reflecting its significant use for stablecoin transfers in various regions.
Circle adopted a conservative, legal-first model. Its freezes occurred strictly under court orders or specific regulatory instructions. Unlike Tether, Circle does not engage in token burning or reissuing; frozen USDC remains locked until legal approval for release is granted.
The nearly 30-fold difference in frozen amounts underscores a fundamental tension in crypto compliance: Tether's willingness to act swiftly to mitigate scams versus Circle's measured strategy that prioritizes legal certainty and due process. This divergence highlights the evolving role of stablecoin issuers at the intersection of blockchain technology and traditional law enforcement, balancing compliance, decentralization, and user trust.
