Tether Freezes $4.2B in USDT Linked to Illicit Activity
Tether, the El Salvador–based issuer of the USDT stablecoin, has frozen about $4.2 billion worth of tokens it says were connected to illicit activity, with the majority of freezes occurring within the last three years. The company framed the action as part of a response to growing investigations and cooperation with global law enforcement as regulators intensify efforts to disrupt crypto-enabled crime.
The episode highlights a tension in the stablecoin market between on‑chain transparency and centralized control: freezes can satisfy compliance demands and aid investigations, but they also raise concerns about censorship risk and counterparty exposure for holders. Market participants and exchanges will be watching for further disclosures and regulatory follow‑up; for users, the incident underscores the importance of custody choices and due diligence when holding large stablecoin positions.