Tether, the crypto company best known for issuing the world’s largest stablecoin, said on Thursday it has frozen $344 million USDT tokens across two wallets on the Tron blockchain after receiving requests from US authorities.
The freeze was implemented after authorities flagged the addresses for alleged links to illegal activity, the company said in a blog post Thursday. The action prevented further movement of the funds.
The company did not specify the nature of the activity or who controlled the wallets. Blockchain analytics firm AMLbot said the addresses appeared in scam-related documents and posts.
The move comes as the debate surrounding the role and responsibility of stablecoin issuers in stemming funds linked to illegal money transfers is back in the spotlight. The Financial Action Task Force recently warned that stablecoins are increasingly being used for illicit transactions, including sanctions evasion and money laundering. Public blockchains allow transactions to be tracked, while issuers retain the ability to freeze assets under certain conditions.
The issue came into focus this month after the $285 million Drift Protocol exploit, in which attackers moved hundreds of millions of USDC stablecoins and shunted funds across chains. Critics argued that Circle ( CRCL ), the issuer of USDC, could have acted more quickly to freeze assets and limit losses, while the company said it only takes such actions when legally required or at the request of law enforcement agencies and authorities.
Tether said it works with law enforcement when wallets are tied to sanctions evasion or criminal networks, and has supported more than 2,300 cases globally across 340 agencies in 65 countries.
