Tether Freezes USDT Worth $225 Million Linked To Scam Amidst DOJ Investigation

Tether Freezes USDT Worth $225 Million Linked To Scam Amidst DOJ Investigation

The United States Department of Justice (DOJ) has been investigating a Southeast Asian syndicate dealing in human trafficking.

As part of its investigation, stablecoin issuer Tether froze assets in USDT that were roughly valued at a total of $225 million.

The announcement

On November 20th, Tether announced that it was working with the DOJ and crypto exchange OKX to freeze USDT worth $225 million that was stored in ‘external self-custodial wallets’.

The company said that a crime syndicate had used the illicit funds, was engaging in a ‘pig butchering’ romance scam.

This kind of scheme involves bad actors developing an online relationship with individuals and conning them later after talking them into investing in legit businesses.

Tether disclosed that they had frozen the USDT funds after months of investigative efforts were put into locating the funds.

The US law enforcement agencies, OKX, the DOJ, and Tether had worked together to locate the illicit funds.

The stablecoin issuer further added that it would also work with US authorities in unfreezing any ‘lawful’ wallets that may have also been frozen as part of the investigation.

The statement

Paolo Ardoino, the CEO of Tether, said that the company’s goal was to establish a new standard in the crypto space in regard to safety.

He said that they planned on accomplishing this via proactively engaging with global law enforcement agencies, along with their dedication to transparency.

He added that they had collaborated with the Department of Justice (DOJ) recently to highlight their commitment to creating a secure environment.

The CEO said that they want to address illicit activities proactively and maintain the highest standards of integrity in the crypto space.

In order to do so, they prioritize using relationships and technology, such as their collaboration with the OKX crypto exchange.

Other details

It should also be noted that this is not the first time that Tether has worked with law enforcement agencies.

It has collaborated with global law enforcement agencies previously to freeze assets that had been linked to criminal syndicates.

For instance, it had frozen USDT valued at about $873,000 in collaboration with the National Bureau for Counter Terror Financing of Israel, which had reportedly been used for terrorist activities in Ukraine and Israel.

The latest amount of USDT that Tether has frozen is the largest that it has done in its entire history. Freezing stablecoins like USDT is easier because they are issued by a single authority.

The same does not apply to cryptocurrencies like Bitcoin because they are not in anyone’s control except for the individual who possesses the private keys.

Therefore, Tether is able to freeze funds and even stop transactions upon the request of law enforcement agencies.

But, crypto that is being moved through exchanges can be treated in the same manner. Last year in August, Binance had restricted access to an account with $1 million worth of crypto.