Tether Freezes $225M in USDT Amid DOJ Investigation into Human Trafficking Ring
Summary:
Tether, in cooperation with the U.S Department of Justice and crypto exchange OKX, has frozen around $225 million in USDT as part of an investigation into a Southeast Asia human trafficking syndicate. The operation came after several months of coordinated probing into the criminal syndicate's illicit funds. Tether, known for working closely with global law enforcement to freeze assets linked to criminal activity, has committed to assisting U.S authorities in unlocking any legitimate wallets mistakenly seized in the crackdown. This freeze marks one of the most significant in Tether's history.
In conjunction with a probe by the United States Department of Justice (DOJ) into a Southeast Asian human trafficking ring, stablecoin provider Tether has frozen around $225 million worth of USDT tokens. In a statement dated November 20, Tether revealed that it, the DOJ, and cryptocurrency exchange OKX had collectively frozen $225 million USDT located in "external self-managed wallets." These illicit funds, according to Tether, were linked to a criminal group who executed a "pig slaughtering" romance fraud, a technique where online relationships are manipulated to swindle victims into investing in seemingly legitimate enterprises. Tether disclosed that this sizable freezing of USDT was the result of an investigation spanning several months, involving Tether, OKX, the DOJ, and multiple U.S. law enforcement agencies. The stablecoin provider committed to assisting U.S. authorities in unlocking any "lawful" wallets that may have been unintentionally seized during this operation. "Thanks to active cooperation with international law enforcement agencies and our dedication to transparency, Tether seeks to establish a new safety benchmark within the crypto sector," expressed Tether CEO Paolo Ardoino. He added that their latest partnership with the Department of Justice highlights their commitment to promoting a secure environment. “By utilizing technology and forging relationships such as with OKX, we aim to preemptively tackle illicit activities and maintain the industry's utmost integrity standards."
Tether, in the past, has collaborated with global law enforcement agencies to freeze resources purportedly tied to criminal groups. This includes the time when Tether collaborated with Israel's National Bureau for Counter Terror Financing to freeze approximately $873,000 USDT used to fund terrorist activities in Israel and Ukraine. This recent freeze of $225 million is Tether's largest yet. Unlike several cryptocurrencies like Bitcoin (BTC), which only the individual with private keys can control, stablecoins like USDT usually have a single entity issuing them. Consequently, these issuers occasionally have the power to freeze assets and stop transactions in compliance with law enforcement requests. Crypto moving via exchanges can also be subject to the same process. As an example, in August 2022, Binance admitted to limiting account access to $1 million crypto for a Tezos tool contributor following a directive from the authorities and similarly restricted accounts affiliated with Hamas militants in October 2023 after a request from Israeli law enforcement. Tether's freeze is a clear indicator that U.S. enforcement agencies are intensifying actions towards cryptocurrency-related crimes.
Published At
11/20/2023 3:02:37 PM
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