Tether, the leading issuer of stablecoins, has taken action to freeze $5.2 million worth of its stablecoin, Tether (USDT), that was associated with phishing scams. These funds were located in 12 Ethereum wallets that were identified as “USDT Banned Address.”
According to the chief security officer of on-chain analytics firm SlowMist, these addresses were being used to launder funds obtained from phishing scams. However, no further details were provided regarding this matter.
Tether has a history of freezing assets connected to hacks, exploits, and scams. Since its inception, the company has blocked more than $1.3 billion, with around $1.6 million linked to terrorist financing. In January 2022, Tether blacklisted three Ethereum addresses holding over $150 million worth of USDT. Additionally, in October 2022, the company froze $8.2 million in USDT on Ethereum and added 215 Ethereum-based USDT addresses to its blacklist.
In late 2022, Tether froze assets worth over $360 million. In October 2023, the stablecoin issuer froze $817,000 in USDT related to terrorist activities in Ukraine and Israel. A month later, it also froze $225 million in USDT associated with romance scammers.
Tether has collaborated with 24 law enforcement agencies across more than 40 countries. Over the past three years, the company has received 198 requests from law enforcement agencies to block wallets, with 339 requests in the last 12 months.
Furthermore, Tether has implemented secondary market controls to freeze any activity connected to individuals or entities on the United States Office of Foreign Assets Control Specially Designated Nationals list. This list includes companies or individuals controlled or owned by sanctioned countries.
The use of decentralized ledger technology enables crypto firms to monitor on-chain funds, while the centralized nature of stablecoins allows issuers to freeze assets involved in illegal activities at the request of law enforcement agencies.
Cointelegraph reached out to Tether for comment on the banned addresses and their association with phishing scams, but no response was received at the time of publication.