Tether Halts $225M in USDT Amidst Romance Scam Investigation

Tether collaborated with OKX, the DOJ, and U.S. law enforcement in a months-long effort, pledging transparency in crypto safety.

Tether Halts $225M in USDT Amidst Romance Scam Investigation
Tether Halts $225M in USDT Amidst Romance Scam Investigation

In response to a US Department of Justice investigation into a Southeast Asian human trafficking syndicate, Tether froze $225 million in USDT tokens.

Tether announced on Nov. 20 that it had frozen $225 million USDT in “external self-custodied wallets” with the DOJ and OKX.

The firm said the illicit funds were used by a crime syndicate that ran a “pig butchering” romance scam, in which bad actors approach unsuspecting victims online and convince them to invest in legitimate businesses before scamming them.

Tether said the USDT was frozen after a “months-long investigative effort” by the firm, OKX, DOJ, and U.S. law enforcement to find funding.

The stablecoin maker said it will help U.S. officials unfreeze “lawful” wallets confiscated as part of the campaign.

“Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for crypto safety,” stated CEO Paolo Ardoino.

“Our recent partnership with the Department of Justice shows our commitment to security. We use technology and partnerships like OKX to prevent illegal activity and uphold the highest industry standards.

Tether worked with Israel’s National Bureau for Counter-Terror Financing to freeze $873,000 in USDT used to fund terrorist activities in Israel and Ukraine.

Tether’s $225 million freeze was reportedly its largest. Bitcoin can be stored beyond the control of anyone with private keys, whereas stablecoins like USDT are usually issued by a single authority.

In response to law enforcement inquiries, issuers can freeze funds and stop transactions. However, exchanged crypto is sometimes treated the same.

After receiving a request from authorities, Binance blocked access to $1 million in crypto for a Tezos tool contributor in August 2022 and froze Hamas militant accounts in October 2023 in response to Israeli law enforcement.