Tether Blocks Millions on Tron Over AML Concerns
Tether, the issuer of the world’s most widely used stablecoin, USDt, has frozen over $12.3 million in digital assets on the Tron blockchain. The freeze took place at 9:15 am UTC on Sunday, according to blockchain data from Tronscan. Although the company has not yet released an official statement, the action is believed to be linked to concerns over possible Anti-Money Laundering (AML) violations or breaches of international sanctions.
The frozen funds add to Tether’s ongoing efforts to tackle illicit activities across its ecosystem, particularly as regulators increase scrutiny of digital assets used in financial crimes.
Policy Aligned with US Sanctions Regime
Tether has repeatedly stated that it enforces a rigorous wallet-freezing policy aimed at curbing money laundering, terrorist financing, and nuclear proliferation. The company’s actions are aligned with the US Treasury’s Office of Foreign Assets Control (OFAC) and its Specially Designated Nationals (SDN) List. In a blog post published on March 7, Tether reaffirmed its commitment to cooperating with global enforcement bodies to ensure the integrity of its stablecoin.
Tether freezes $12.3 million USDT. Source: Tronscan
This recent freeze mirrors Tether’s earlier move on March 6, when it froze $27 million in USDT associated with the Garantex crypto exchange. The same day, Garantex halted operations, accusing Tether of targeting the Russian crypto market and blocking wallets valued at more than 2.5 billion rubles (approximately $27 million).
OFAC had previously sanctioned Garantex in April 2022, citing its failure to comply with AML regulations. Yet, despite these actions, blockchain analytics firm Global Ledger identified over $15 million still linked to Garantex as recently as June 5.
FCU’s Role in Crime Prevention
Tether’s efforts are part of a broader initiative led by the T3 Financial Crimes Unit (FCU), a task force formed in partnership with Tron and blockchain analytics firm TRM Labs. The FCU supports law enforcement agencies across the globe in detecting and freezing suspicious crypto transactions. As of January 2025, the unit had frozen $126 million worth of USDT in just six months.
These efforts underline the evolving role of private entities like Tether in aiding regulatory oversight and improving financial security in the decentralised finance (DeFi) space.
Lazarus Group and the Threat of State-Backed Hacking
The significance of such actions has been highlighted by the activities of the Lazarus Group, a North Korean state-backed hacking collective notorious for laundering stolen cryptocurrency. Between 2020 and 2023, Lazarus reportedly laundered more than $200 million in digital assets, with total thefts exceeding $3 billion since 2009.
Garantex ETH flows. Source: Global Ledger
In November 2023, Tether blacklisted over $374,000 in stolen crypto linked to Lazarus. Blockchain investigator ZachXBT reported that three out of four major stablecoin issuers collectively blacklisted an additional $3.4 million held across addresses associated with the group.
Decentralisation vs Security: A Growing Debate
While Tether’s asset-freezing capability has been applauded by regulators, it has also sparked criticism from decentralisation advocates. They argue that such centralised control undermines the core principles of blockchain technology.
Nevertheless, Tether maintains that its interventionist approach is vital in maintaining trust and compliance within the crypto industry. With rising geopolitical tensions and heightened regulatory expectations, the company is likely to continue expanding its crime-fighting toolkit.
