Tether has frozen more than $12.3 million in USDT on the Tron blockchain, continuing its efforts to block suspicious activity tied to money laundering, sanctioned entities, and cybercrime.
The freeze occurred at 9:15 am UTC on Sunday, according to blockchain data from Tronscan. Tether hasn’t commented publicly on the move, but it likely stems from compliance checks linked to the U.S. Treasury’s sanctions list or anti-money laundering (AML) rules.
In a March blog post, Tether said it follows a “strict wallet-freezing policy” that aligns with the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals list, and prevents the misuse of USDT in criminal financing and sanctioned markets.
This isn’t the first high-profile freeze. In March, Tether blocked $27 million on wallets tied to the Garantex exchange — a Russia-linked platform sanctioned by OFAC in 2022 for ignoring AML standards. Garantex accused Tether of targeting the Russian crypto market, claiming its frozen wallets held more than 2.5 billion rubles (around $27 million).
Despite sanctions, new data shows Garantex-linked wallets still hold over $15 million in reserves as of June 5, according to blockchain analytics firm Global Ledger.
Garantex was sanctioned by the OFAC in April 2022 for facilitating money laundering connected to ransomware attacks and darknet markets. At the time, it was the third-largest crypto exchange sanctioned by the Treasury. Despite the sanctions, analytics firm Elliptic noted that Garantex transacted $60 billion after the designation.
U.S. authorities also indicted the exchange’s key operators, Aleksej Besciokov and Aleksandr Mira Serda. Besciokov was apprehended in India and faces extradition to the U.S., while Serda remains at large.
Tether’s ability to freeze funds has stirred debate in crypto circles, especially among decentralization advocates. But the mechanism helped law enforcement and analytics firms stop hundreds of millions in suspected laundering attempts.
Tether, along with the Tron Network and analytics firm TRM Labs, launched the T3 Financial Crimes Unit in 2024. In its first six months, the group froze $126 million in USDT flagged in illicit transactions, often in coordination with international authorities.
These efforts have become increasingly relevant with the ongoing threat posed by North Korea’s Lazarus Group, which is believed to have laundered more than $200 million in stolen crypto between 2020 and 2023. Tether blacklisted over $374,000 in November 2023 linked to Lazarus, while other stablecoin issuers have frozen an additional $3.4 million tied to the group.
