Tether Halts $4.2 Billion in Suspicious Tokens Over Three Years
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Tether, a major player in the stablecoin market, has reportedly halted the movement of around $4.2 billion in its USDt tokens due to links with criminal activities over a three-year span.
Since the start of 2023, the company has increasingly restricted these funds, aligning with a global trend where regulators and law enforcement agencies are ramping up their efforts to combat crypto-related fraud and money laundering, as indicated by reports from the company.
The USDt token, which is pegged to the US dollar, stands as the largest stablecoin in circulation, boasting an impressive total of over $180 billion, significantly rising from approximately $70 billion three years ago.
Tether possesses the capability to freeze tokens on the blockchain by blacklisting specific wallet addresses upon request from law enforcement.
Recent developments highlight Tether’s involvement in aiding authorities in freezing funds tied to illicit activities. Just this week, the company announced it had assisted the US Department of Justice in seizing nearly $61 million in USDt that were linked to scams known as ‘pig-butchering.’ This type of scam involves criminals developing personal relationships with victims to convince them to transfer significant sums of money.
Earlier this month, Tether also responded to Turkish authorities’ requests by freezing around $544 million in cryptocurrency associated with alleged illegal online betting operations and money laundering schemes.
According to insights from blockchain analysis firm Elliptic, by late 2025, both Tether and Circle had blocked approximately 5,700 wallets containing about $2.5 billion, with a substantial portion, roughly three-quarters, involving USDt at the time they were frozen.
In related news, Tether is currently experiencing its largest decline in USDt supply in three years, with circulating amounts dropping by around $1.5 billion in February, following a $1.2 billion reduction in January. This trend mirrors the liquidity challenges observed after the FTX collapse in late 2022.
While Tether suggests these figures signify temporary shifts in distribution rather than a decrease in demand, they also acknowledge a similar multibillion-dollar drop in the supply of USDC during the same period.
These developments underline Tether’s pivotal role in the evolving regulatory landscape as authorities increasingly rely on stablecoin issuers to mitigate the flow of suspicious funds.
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