Tether Freezes $225 Million in Stablecoin Following DOJ Human Trafficking Investigation

  • Tether has frozen $225 million worth of its own stablecoin, USDT, following an investigation by the U.S. Department of Justice (DOJ) into an international human trafficking syndicate.
  • This marks the largest-ever freeze of a stablecoin, according to a press release issued by Tether.
  • Tether’s decision to freeze the funds demonstrates its commitment to combating financial crime and upholding its regulatory obligations.

Stablecoin issuer Tether has frozen $225 million worth of its own stablecoin, USDT, following an investigation by the U.S. Department of Justice (DOJ) into an international human trafficking syndicate in Southeast Asia. This marks the largest-ever freeze of a stablecoin, a press release from Tether announced.

The DOJ investigation, which spanned several months, utilized blockchain analysis tools provided by Chainalysis to track the flow of funds associated with the human trafficking network. The investigation revealed that the syndicate was using USDT to launder illicit proceeds and facilitate their criminal activities.

Tether’s decision to freeze the $225 million in USDT comes as a direct response to the DOJ’s findings. The company stated that it is committed to cooperating with law enforcement and preventing its platform from being used for illicit purposes.

“We are committed to working with law enforcement to combat human trafficking and other illegal activities,” stated Tether CTO Paolo Ardoino in the press release. “We are proud to have played a role in this investigation and to have helped to bring criminals to justice.”

On-chain data analysis reveals that Tether froze the $225 million across 37 wallets, with the majority of those tokens previously being transferred to OKX, a cryptocurrency exchange that also actively participated in the investigation.

This action by Tether highlights the growing role of stablecoins in the global financial system and the importance of responsible cryptocurrency usage. The company’s decision to freeze the illicit funds demonstrates its commitment to upholding financial integrity and combating criminal activity.

As the use of stablecoins continues to expand, it is crucial for regulatory bodies and cryptocurrency companies to work together to ensure that these digital assets are not used for illicit purposes. Tether’s actions in this case set a precedent for other stablecoin issuers and demonstrate the importance of proactive measures to prevent the misuse of cryptocurrencies.

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