Tether freezes $4.2B in USDT tied to illicit activity

El Salvador-based Tether has frozen about $4.2 billion worth of its USDT stablecoin at the request of law enforcement, most of it in the past three years. The company also assisted the U.S. Justice Department in freezing nearly $61 million connected to pig-butchering scams.

A company representative, in comments provided late Thursday, put $3.5 billion of the total in freezes since 2023. Tether, the largest stablecoin issuer by circulating supply, can remotely lock tokens in user wallets when authorities submit requests.

The Justice Department action targeted wallets linked to pig-butchering, a fraud in which scammers build relationships with victims before pushing them into fake investment schemes. Tether disclosed the enforcement support this week.

The firm has previously blocked wallets tied to human trafficking and activity it described as related to terrorism and warfare in Israel and Ukraine. The sanctioned Russian crypto exchange Garantex has stated that funds on its platform were blocked.

Tether reports more than $180 billion of USDT in circulation, up from about $70 billion three years ago. Stablecoins are widely used in crypto trading as a dollar-pegged instrument.

Regulators and policymakers have increased scrutiny of illicit finance in digital assets. The Financial Action Task Force last year urged countries to strengthen oversight of crypto markets. Blockchain researchers estimate money launderers received at least $82 billion in cryptocurrencies last year, up from about $10 billion in 2020, with much of the growth tied to Chinese-speaking groups.

Tether’s ability to freeze tokens introduces controls over transfers that occur on public blockchains. The company says it acts on information from law enforcement to identify wallets and restrict USDT linked to suspected criminal activity.

A country-by-country breakdown of the $4.2 billion total was not provided. The company indicated most freezes occurred in the past three years as investigations intensified and the stablecoin market expanded.

As we reported earlier, federal agents in North Carolina seized more than $61 million in USDT that prosecutors tied to a pig-butchering crypto investment scam. The U.S. Attorney’s Office for the Eastern District of North Carolina announced the seizure on Tuesday, Feb. 24, 2026, and said the funds are subject to forfeiture.

Investigators traced victim funds through laundering wallets and identified addresses still holding substantial balances. According to prosecutors, scammers posed as romantic partners, steered victims to look-alike trading sites showing fake profits, then blocked withdrawals and demanded extra “tax” or “fee” payments.