Tether says it has frozen roughly $4.2 billion worth of its USDT stablecoins linked to suspected criminal activity over the past three years, and that most of those restrictions were imposed since 2023 as regulators and law enforcement increased scrutiny of crypto-related fraud and sanctions evasion.
USDT is the largest stablecoin, with more than $180 billion outstanding today — up from about $70 billion three years ago. The company has the ability to blacklist wallet addresses and effectively immobilize tokens on-chain when requested by authorities.
Tether recently cooperated with the U.S. Department of Justice to seize nearly $61 million in USDT tied to so-called “pig-butchering” investment scams, in which fraudsters befriend victims before persuading them to transfer funds. In February, Tether says it froze about $544 million at the request of Turkish authorities in an alleged illegal online betting and money‑laundering investigation.
Blockchain analytics firm Elliptic reported that by late 2025 stablecoin issuers, including Tether and Circle, had blacklisted roughly 5,700 wallets holding about $2.5 billion; roughly three-quarters of those wallets contained USDT at the time of the freezes.
USDT’s circulating supply has also contracted recently. Blockchain data show an approximately $1.5 billion drop in February following a $1.2 billion decline in January — the largest monthly reduction in about three years — a pattern reminiscent of liquidity shifts after the 2022 FTX collapse. Tether maintains these moves reflect short-term redistribution rather than falling demand, and notes that rival USDC experienced multibillion-dollar reductions over the same interval.
The publisher of the original report emphasizes independent, transparent journalism and encourages readers to verify information independently. See its editorial policy at https://cointelegraph.com/editorial-policy.