Tether Stopped Crime-Linked $4.2B in USDT in 3 Years: Report
Stablecoin issuer Tether has reportedly suspended $4.2 billion worth of USDt tokens over the past three years in connection with alleged criminal activity.
Most of the blocked funds will be restricted from 2023 as regulators and law enforcement agencies step up investigations into crypto-related fraud and sanctions evasion, the El Salvador-based firm told Reuters on Friday.
Tether's dollar-pegged USDt (USDT) token is the largest stablecoin in circulation, with more than $180 billion in circulation, up from about $70 billion three years ago.
Tether can blacklist wallet addresses when requested by authorities and tie tokens to the blockchain.
Related: Tether-Backed Oobit Adds Crypto-to-Bank Transfers to Local Payment Networks
Tether helps governments freeze money
On Tuesday, Tether announced the US Department of Justice's support in seizing nearly $61 million in “pork farming” fraud, a technique in which criminals contact victims before convincing them to send money.
Earlier this month, the company seized about $544 million in cryptocurrency at the request of Turkish authorities, freezing funds linked to alleged illegal online betting and money laundering operations.
According to blockchain analytics firm Elliptic, by the end of 2025, stablecoin issuers Tether and Circle have blacklisted nearly 5,700 wallets worth $2.5 billion, with three-quarters of the banned addresses holding USDt.
RELATED: Tether USDT Supply Set For Biggest Monthly Drop Since 2022 FTX Fall
USDt supply decreases
According to Cointelegraph, USDt is experiencing its biggest monthly supply decline in three years, after a $1.2 billion drop in January, while supply fell to $1.5 billion in February, according to blockchain data. The contract echoes the period following the collapse of FTX at the end of 2022 and may indicate more liquidity in the crypto markets.
Teter said the figure reflects short-term supply changes rather than weakening demand, adding that the USDC has seen a multibillion-dollar decline over the same period.
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