Tether Collaborates with DoJ to Freeze $225 Million in USDT Linked to Human Trafficking Probe

In a significant move against an international human trafficking ring, stablecoin issuer Tether has frozen $225 million worth of its cryptocurrency, USDT, as part of a U.S. Department of Justice (DOJ) investigation. This action targets a Southeast Asian syndicate involved in the “pig butchering” scam, which the FBI states cost U.S. citizens a staggering $3.3 billion in 2022.

The elaborate scam, which began with simple romantic overtures and led to victims trading on fraudulent crypto exchanges, resulted in the FBI identifying multiple blacklisted wallet addresses, as reported by blockchain analytics firm Peckshield. Notably, one of these wallets contained up to $87 million in USDT. These funds were stored in external self-custodial wallets, indicating they were not owned by Tether customers.

Tether, utilizing Chainlysis’ on-chain tracking tools, worked closely with the DOJ and crypto exchange OKX in this investigation. The company emphasized its commitment to maintaining a secure ecosystem in its statement on Nov. 20.

“Our recent collaboration with the Department of Justice underscores our dedication to fostering a secure environment. We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry,” Paolo Ardoino, CEO of Tether, stated.

OKX’s Chief Innovation Officer Jason Lau echoed this sentiment, highlighting the importance of communication between crypto stakeholders and law enforcement in ensuring public safety.

This development follows recent scrutiny by U.S. policymakers over Tether and Binance’s alleged involvement in money laundering and other criminal activities. Prior to Senators Cynthia Lummis and Representative French Hill’s call for DOJ action, Tether had undergone a leadership shift with Paolo Ardoino replacing Jean-Louis van der Velde as CEO.

Tether, a major holder of U.S. treasury bills, had also previously frozen 32 addresses connected to illicit financing activities in Israel and Ukraine, two nations currently facing geopolitical tensions.