Tether has reportedly frozen approximately $4.2 billion worth of its USDt tokens connected to suspected criminal activity over the past three years. The majority of these frozen funds were restricted since 2023, as regulators and law enforcement agencies intensified their scrutiny of crypto-related fraud and sanctions evasion.
Tether's dollar-pegged USDt token is the largest stablecoin in circulation, with over $180 billion outstanding. The company has the ability to freeze tokens directly on the blockchain by blacklisting wallet addresses when requested by authorities.
Recently, Tether assisted the U.S. Department of Justice in seizing nearly $61 million in USDt tied to "pig-butchering" scams. Earlier this month, the company also froze approximately $544 million in cryptocurrency at the request of Turkish authorities, blocking funds linked to an alleged illegal online betting and money-laundering operation.
Blockchain analytics firm Elliptic reported that by late 2025, stablecoin issuers Tether and Circle had blacklisted around 5,700 wallets holding about $2.5 billion, with a significant portion of these addresses containing USDt when frozen.
