Tether, the crypto company best known for issuing the world’s largest stablecoin, said on Thursday it had frozen $344 million worth of USDT tokens on two wallets on the Tron blockchain after receiving requests from US authorities.
The freeze was carried out after authorities flagged the addresses for suspected links to illicit activity, the company said in a blog post on Thursday. This action prevented any further movement of funds.
The company did not specify the nature of the business or who controlled the portfolios. Blockchain analytics firm AMLbot said the addresses appeared in documents and posts related to the scam.
The move comes as the debate over the role and responsibility of stablecoin issuers in stopping funds linked to illegal money transfers returns to the spotlight. The Financial Action Task Force recently warned that stablecoins were increasingly being used for illicit transactions, including to circumvent sanctions and launder money. Public blockchains allow transactions to be traced, while issuers retain the ability to freeze assets under certain conditions.
The issue came to light this month following the $285 million Drift Protocol exploit, in which attackers moved hundreds of millions of USDC stablecoins and merged funds across chains. Critics have argued that Circle (CRCL), the issuer of USDC, could have acted more quickly to freeze assets and limit losses, while the company said it only took such steps when required by law or at the request of law enforcement and authorities.
Tether said it works with law enforcement when wallets are linked to sanctions or criminal networks, and has supported more than 2,300 cases globally across 340 agencies in 65 countries.
