Tether, the top stablecoin issuer, has taken action to freeze $5.2 million worth of its stablecoin, Tether (USDT), which was connected to phishing scams. These funds were held in 12 Ethereum wallets labeled as “USDT Banned Address.” The decision to freeze these assets came after on-chain analytics firm SlowMist’s chief security officer revealed that the addresses were being used to launder money obtained from phishing scams.
Tether has a history of freezing assets associated with hacks, exploits, and scams. Since its inception, the company has blocked over $1.3 billion, with approximately $1.6 million tied to terrorist financing. In January 2022, Tether added three Ethereum addresses containing more than $150 million worth of USDT to its blacklist. In October 2022, the company froze $8.2 million in USDT on Ethereum and added 215 Ethereum-based USDT addresses to its blacklist.
Throughout 2022 and 2023, Tether continued to freeze significant amounts of assets. In October 2023, the stablecoin issuer froze $817,000 in USDT linked to terrorist activity in Ukraine and Israel. The following month, it froze $225 million in USDT associated with romance scammers.
Tether has also collaborated with 24 law enforcement agencies across 40 countries. Over the past three years, the company has received 339 requests from law enforcement agencies to block wallets, with 198 of those requests occurring in the last 12 months.
Additionally, Tether has implemented controls in the secondary market to freeze any activity involving individuals or companies listed on the United States Office of Foreign Assets Control Specially Designated Nationals list. This list includes entities controlled or owned by sanctioned countries.
The use of decentralized ledger technology allows cryptocurrency firms to monitor funds on the blockchain, while the centralized nature of stablecoins enables issuers to freeze assets associated with illegal activities at the request of law enforcement agencies.
Cointelegraph reached out to Tether for clarification on the banned addresses and their connection to phishing scams but did not receive a response at the time of publication.
Source:
MistTrack
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