Tether Reacts: Phishing Links Cause $5.2M in USDT to Be Frozen

  • Tether is still keeping an eye on and penalizing illegal activity. It detected and blocked USDT worth $5.2 million on May 14 in an attempt to impose stringent network controls and stop money laundering.
  • First, MisTrack, a blockchain tracking software, detected the unlawful funds. A total of twelve Ethereum (ETH) wallets that were marked as “USDT Banned Addresses” received the frozen USDT. It was believed that the money was obtained through a number of phishing scams.

USDT Is Frozen, Signaling Tether’s Attempts to Stop Illegal Activity

Recent events have brought attention to Tether’s proactive efforts to stop illegal activity in the cryptocurrency space, demonstrating the company’s dedication to maintaining the network’s security and integrity.

Tether collaborated with the US Department of Justice (DoJ) and the Federal Bureau of Investigation (FBI) in March 2024 to confiscate $1.4 million in USDT from a network of tech support scammers.

Tether keeps a close eye on USDT addresses and has taken significant steps to block addresses that raise red flags.

In January 2022, the business blocked three Ethereum addresses that contained over $150 million in USDT. Then, in October 2022, $8.2 million worth of USDT on Ethereum was frozen, and 215 Ethereum-based USDT addresses were added to the blacklist.

Tether has reacted to new dangers with lightning speed. The USDT issuer took action against USDT tied to terrorist activity in Ukraine and Israel in late 2022, blocking over $360 million in assets linked to criminal activities. In October 2023, the issuer froze $817,000.

Furthermore, $225 million in USDT linked to romance scams was frozen in November 2023.

Tether and Chainalysis have teamed together to provide monitoring and analysis tools that will help find wallets that could be dangerous or linked to prohibited or illegal addresses.

The UN study that named USDT as the preferred cryptocurrency for money laundering prompted Tether to freeze USDT, which in turn sparked rumors of a possible US government probe.

By implying that Tether, the biggest stablecoin issuer globally, is in fact the target of the US government, Ripple CEO Brad Garlinghouse fanned the flames further.

“The U.S. government is going after Tether, that is clear to me,” said Garlinghouse in an interview with the World Class podcast. Despite Tether’s important role in the bitcoin ecosystem, Garlinghouse expressed doubt about the potential consequences of regulatory action against the company.

Tether CEO Paolo Ardoino responded sharply to these comments, labeling Garlinghouse as a “uninformed CEO.”

In addition to pointing out that Ripple is currently the subject of an SEC investigation, Ardoino implied that Garlinghouse’s remarks were motivated by the possibility of Ripple’s future stablecoin competing with USDT.

He also emphasized Tether’s cooperation with law enforcement in the fight against illegal activity. In the last 12 months, the company has responded to 198 requests to ban wallets, and in the prior three years, it has handled 339 requests. The company has dealt with 24 agencies in more than 40 countries.

The identification and mitigation of hazards related to illicit operations employing USDT has been made possible thanks in large part to these relationships.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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