Tether Helps DoJ Seize $225.3 Million in USDT Linked to Fraud

Tether, a leading issuer of stablecoins across various blockchains, has been acknowledged by the United States Department of Justice (DoJ) for its role in facilitating the seizure of approximately $225 million in USDT, which was linked to a widespread fraud scheme. The stablecoin issuer collaborated with the DoJ to freeze these funds, demonstrating its commitment to compliance and security within the digital asset ecosystem.

The DoJ revealed that the frozen funds were stolen from over 400 suspected victims. The department filed a civil forfeiture complaint in the U.S. District Court for the District of Columbia, highlighting the severity and impact of the fraudulent activities. Special Agent in Charge Shawn Bradstreet of the U.S. Secret Service (USSS) San Francisco Field Office emphasized the significance of this seizure, noting that it marks the largest cryptocurrency seizure in USSS history. These scams, often referred to as "pig butchering," prey on the trust of victims, leading to severe financial hardship.

Tether, headquartered in El Salvador, has been under scrutiny for its role as a major issuer of U.S. dollar-dominated digital currencies. The company remains a significant buyer of U.S. Treasury securities, further solidifying its position in the financial landscape. With the impending implementation of the GENIUS Act, which received bipartisan support in the U.S. Senate, Tether is poised to remain compliant with new regulations. The GENIUS Act mandates that all U.S. dollar-focused stablecoin issuers implement a feature that enables the freezing of funds, ensuring that digital assets are not misused by malicious actors.

Paolo Ardoino, CEO of Tether, stated, "We are setting the standard for compliance in digital assets and leading efforts to ensure stablecoins are not misused by bad actors." This collaboration with law enforcement, including the U.S. Secret Service, has been crucial in identifying and freezing over 144 accounts on the OKX exchange that were linked to these confidence scams. The accounts, originating from IP addresses in the Philippines, deposited $3 billion in crypto over a year, underscoring the extensive nature of the money laundering operation.

The DOJ's seizure of $225.3 million in USDT is the largest forfeiture related to "pig butchering" crypto scams. This action underscores Tether's credibility as a stablecoin issuer committed to working with law enforcement to combat illicit activities. Tether has previously frozen $2.7 billion in tokens related to criminal activity, showcasing its proactive approach to maintaining the integrity of its stablecoin. The USDT token, which operates on multiple blockchains, is a vital component of the digital asset economy, facilitating traders' entry and exit from crypto transactions. Tether's efforts to collaborate with law enforcement are essential in preserving the trust and stability of the cryptocurrency market, serving as a reminder of the importance of compliance and the role that stablecoin issuers play in preventing the misuse of digital assets.