Tether suspends wallets linked to terrorist groups in Israel and Ukraine

Tether, the world's largest steelcoin issuer, has announced that it has suspended 32 blockchain addresses linked to terrorist groups in Israel and Ukraine.

In a statement on Monday, the company said it is working with Israel's National Counter-Terrorist Financing Bureau (NBCTF) to fight crypto-funded crime. In total, the impounded addresses contained $873,118.34 worth of property.

“Tether's ability to recover and return stolen funds to legitimate users demonstrates the new capabilities and level of security that blockchain technologies bring to the global financial system,” the statement said.

Unlike traditional cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), stablecoins like Tether USDT are directly issued by central entities and backed by centralized stores of real-world assets. In practice, this means that users holding stablecoins can be programmatically blocked from their funds at the request of the government, just like traditional bank deposits.

Tether has previously used its power to block millions of dollars lost by both DeFi hackers and phishing scammers. However, the rival stablecoin community has refused to block addresses linked to privacy protocol Tornado Cash after the US Treasury imposed sanctions on it last year, even as it chose to comply with the fine.

In total, Tether has led 31 different agencies from countries such as the United States, Canada, Brazil, South Korea, and more to freeze more than $835 million in criminally linked crypto worldwide.

“Contrary to popular belief, cryptocurrency transactions are not anonymous. They are highly visible and traceable assets,” said Tether CEO Paolo Arduino in a statement. “Criminals who are foolish enough to use cryptocurrencies for illegal activities will inevitably be identified.”

Following a deadly attack by Hamas on Israel earlier this month, Israeli authorities have banned crypto accounts suspected of being linked to Hamas, including those on crypto exchanges such as Binance.

According to data from Chainalysis, crypto has helped Hamas secure tens of thousands of dollars in Bitcoin donations since 2019. Pro-Russian groups in the conflict between Russia and Ukraine have used more than $2 million raised in Bitcoin and Ethereum to fund their war effort.

Edited by Stacy Elliott.