Tether has announced the freezing of approximately 225 million in USDT tokens in external self-custodied wallets linked to an international human trafficking syndicate in Southeast Asia.
According to Tether, this was part of an investigation in collaboration with crypto exchange, OKX, and the United States Department of Justice (DOJ). The group in question is reportedly responsible for a global ‘pig butchering’ romance scam.
Moreover the investigation utilized tools from blockchain analysis firm, Chainalysis.
According to Tether, the move stands as the most extensive freeze of stablecoins in history.
It is also an indicator of the transparency of blockchain transactions, and how they can serve as a powerful deterrent to illicit activities, setting a significant precedent for the industry. According to Tether, during a months-long investigation, U.S. 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.
“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,” said Paolo Ardoino, CEO of Tether.
“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.”
Tether, which remains the largest stablecoin with $88.7 billion in market capitalization has in the past been the subject of scrutiny from law enforcement agencies. In 2021 it was hit by an $18.5 million fine by the New York Attorney General’s office over a lack of transparency to its assets.
The company’s announcement comes amid continued scrutiny of the cryptocurrency sector from law enforcement agencies in the United States. Binance, the world’s largest exchange, was recently fined $4 billion for engaging in anti-money laundering, unlicensed money transmitting, and sanctions violations.
“If virtual currency exchanges and financial technology firms wish to realize the tremendous benefits of being part of the U.S. financial system and serving U.S. customers, they must play by the rules. And if they do not, the U.S. government will act,” said U.S. Treasury Secretary, Janet Yellen.
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