Tether freezes $225 million worth of stolen USDT after DOJ investigation

Quick Take

  • Tether “proactively and voluntarily” froze around $225 million worth of USDT stored in self-custodied wallets linked to a human trafficking syndicate, the company said.
  • The move followed an investigation involving the U.S. Department of Justice that also saw participation from OKX.

Tether USDT -0.04% said Monday that it "proactively and voluntarily" froze about $225 million worth of USDT held in self-custodied wallets linked to an international human trafficking group in Southeast Asia responsible for a "pig butchering" romance scam. 

The move, the largest freeze of USDT ever, followed an investigation involving the U.S. Department of Justice that also saw participation from OKX. Tools from blockchain analysis firm Chainalysis were used in the joint effort.

"During a months-long investigative effort by Tether and OKX, 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," Tether said, adding that the frozen wallets were on the secondary market and not associated with Tether customers. 

On Tuesday, the DOJ announced seizing $9 million in USDT from a network of scammers who stole from over 70 victims across the U.S. "through romance scams and cryptocurrency confidence scams." 

"This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims,” said acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. 

Tether manages the smart contract used to issue USDT in a centralized way, allowing the company to freeze certain addresses. Lookonchain reported that 37 wallets were involved in the operation. 

OKX did not immediately respond to requests for comment from The Block. A Chainalysis spokesperson said the firm was not directly involved in the investigation. 


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'Fostering a secure environment'

Tether said it would "work quickly" with law enforcement to unfreeze any lawful wallets that might have been involved in the operation. 

"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 CEO Paolo Ardoino said in the statement.

Earlier this year, Tether froze 32 addresses reportedly linked to Hamas and the war in Ukraine. Earlier. The company also froze $2.5 million of funds tied to the the Multichain protocol exploit.

Update (17:55 p.m. EST): Added details of the DOJ announcement on Tuesday.


© 2023 The Block. All Rights Reserved. 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.

About Author

Anna is a senior policy reporter and assistant editor at The Block. She has a background in political journalism and covered Russian civil society for a range of news outlets in Moscow, including the award-winning newspaper Novaya Gazeta. Before joining The Block, Anna spent the past five years investigating cryptocurrency policies and adoption around the world at CoinDesk. Anna owns bitcoin and a gift NFT of sentimental value.


To contact the editor of this story:
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