- The move came following a DOJ investigation into an international human trafficking syndicate in Southeast Asia
- Tether has worked with global law enforcement agencies in the past to freeze assets believed to be linked to criminal syndicates
- It worked with Israel’s National Bureau for Counter Terror Financing to freeze approximately $873,000 worth of USDT
Stablecoin issuer Tether made a bold move that paralyzed an international crime syndicate when it “proactively and voluntarily” froze $225 million in stolen USDT linked to a romance scam.
Tether, crypto exchange OKX and the U.S. Department of Justice worked together to make the largest-ever freeze in the history of USDT, the stablecoin issuer said in a statement. The $225 million in USDT it froze was “in external self-custodied wallets linked to an international human trafficking syndicate in Southeast Asia responsible for a global ‘pig butchering’ romance scam.”
“Pig butchering” is a kind of scam where malicious actors build trust with their victims using social media platforms and other messaging and dating apps and then lure them into investing in bogus crypto or online trading scams.
The move came shortly after an investigation by the blockchain analytics firm Chainalysis.
Tether and OKX then notified the DOJ and other law enforcement bodies of the movements of the alleged illegal funds, which led to the freezing of the crypto wallets.
“Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for safety within the crypto space,” Tether CEO Paolo Ardoino said. “Our recent assistance to the Department of Justice underscores our dedication to fostering a secure environment. We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry.”
On-chain data from Web3 data analysis tool LookOnChain revealed that Tether froze the $225 million across 37 wallets, with most of the tokens earlier being transferred to crypto exchange OKX.
“Collaborating with industry stakeholders, including law enforcement agencies, is a key tenet of our approach to building trust and serving the public good as a leader in the crypto industry. At OKX, we will continue to contribute to these initiatives on a proactive basis,” OKX Chief Innovation Officer Jason Lau said.
Tether has worked with global law enforcement agencies in the past to freeze assets believed to be linked to criminal syndicates. It worked with Israel’s National Bureau for Counter-Terror Financing to freeze approximately $873,000 worth of USDT allegedly used to fund terrorist activities in Ukraine and Israel.
In 2022, $2.57 billion was lost to cryptocurrency investment scams, mainly fueled by pig butchering schemes, according to the FBI’s Internet Crime Complaint Center (IC3).