Tether, the leading issuer of the USDT stablecoin, has frozen two cryptocurrency addresses containing a combined total of $344 million. On-chain analyst mlm (@mlmabc) reported the action on X, revealing that one address held $213 million and another held $131 million. This enforcement marks one of the largest single freezes in Tether’s history.
The freeze involves two distinct blockchain addresses, both likely on the Tron network. The first address, containing $213 million in USDT, likely belongs to an entity under investigation. The second address, holding $131 million, may be linked to the same or a related operation. The action was reportedly carried out in coordination with the U.S. Office of Foreign Assets Control (OFAC) and other law enforcement agencies as part of ongoing investigations into illicit financial activity. Tether has not publicly disclosed the specific reasons for the freeze.
This action follows Tether’s established policy of cooperating with law enforcement. The company has frozen over $1 billion in USDT since its inception and regularly works with global agencies, including the U.S. Department of Justice and the FBI. Historically, Tether has taken significant freeze actions: in 2023, it froze over $873 million in USDT linked to a crypto theft; in 2022, it froze $1.6 million tied to a phishing scam; and in 2021 it cooperated with the DOJ to freeze $1.4 million connected to a romance scam.
Tether uses a blacklist mechanism to freeze addresses by adding them to a smart contract blacklist, preventing them from transferring USDT tokens. The process is irreversible without Tether’s intervention, and the company may offer address owners a process to appeal depending on the circumstances.
The freeze reinforces that USDT is not a fully decentralized asset, as users must trust Tether to manage the token responsibly. While some traders may view this as a positive sign that Tether can act against bad actors, others may see it as a risk that centralized control contradicts the ethos of decentralization. Market reactions have been muted so far, with USDT’s price remaining stable at $1.00 and the broader crypto market showing no significant volatility.
This move underscores Tether’s role in maintaining stablecoin integrity amidst ongoing global regulatory developments, including the European Union’s Markets in Crypto-Assets regulation and debates in the U.S. Congress over stablecoin legislation.
