Tether Freezes $225M In USDT Linked To Human Trafficking Group

Table of Contents

Stablecoin issuer Tether has frozen $225 million worth of stolen USDT following a collaboration with the United States Department of Justice and crypto exchange OKX. 

The USDT was linked to a human trafficking syndicate operating in Southeast Asia and was frozen following an investigation by the Department of Justice. 

Tether Freezes $225 Million Worth Of USDT 

The US Department of Justice investigation was ongoing for months and used blockchain analysis tools provided by Chainalysis. The freezing of the USDT in question marks the largest-ever freeze of stablecoins. The freezing of the USDT was done to counter the trafficking group behind a global “pig butchering” scam. According to on-chain data from Lookonchain, Tether froze $225 million worth of USDT across 37 wallets. A majority of the tokens in question were previously transferred to the crypto exchange OKX. OKX also participated in the investigation and operation to freeze the stolen funds. 

“Tether froze ~225M $USDT (37 wallets) linked to a human trafficking group 1 hour ago. These wallets had been moving $USDT before being frozen, with most of the $USDT being transferred to #OKX.”

According to the statement published by Tether, a joint operation between the stablecoin issuer and OKX, US law enforcement agencies, and the DOJ were alerted to the location of illicit funds through blockchain analysis. The actions led to a freeze request by the United States Secret Service and a voluntary freeze by Tether. The frozen wallets are currently on the secondary market and are not associated with Tether’s users. 

“During a months-long investigative effort by Tether and OKX, US law enforcement agencies, including the DOJ, were proactively alerted to the location of the illicit funds by analyzing the flow of those funds through the blockchain. These actions prompted the initiation of a freeze request by the United States Secret Service and a voluntary freeze by Tether. The frozen wallets are on the secondary market and are not associated with Tether’s customers.”

Collaboration Between Crypto And Law Enforcement

The frozen funds were connected to a notorious human trafficking group operating in Southeast Asia. The development also marks a rare occasion where crypto companies and law enforcement collaborate for the greater good. It highlights that crypto companies and law enforcement would benefit from working together to prevent using digital assets for criminal purposes. The transparency enabled by blockchains can act as a deterrent for illicit activities, serving as a precedent for future collaboration between law enforcement and crypto companies. Speaking about the collaboration, Paolo Ardoino, the CEO of Tether, stated, 

“Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for safety within the crypto space. Our recent assistance to the Department of Justice underscores our dedication to fostering a secure environment. We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry.”

OKX Chief Innovation Officer Jason Lau stated that OKX will continue to contribute to future collaborations between crypto companies and law enforcement proactively. 

“Collaborating with industry stakeholders, including law enforcement agencies, is a key tenet of our approach to building trust and serving the public good as a leader in the crypto industry. At OKX, we will continue to contribute to these initiatives on a proactive basis.”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.