- Tether has frozen approximately $4.2 billion in USDt over three years connected to suspected crimes, with most blacklisting occurring since 2023.
- The stablecoin issuer recently assisted U.S. and Turkish authorities in seizing over $600 million in funds tied to scams and illegal operations.
- The circulating supply of USDt is experiencing its steepest monthly decline since late 2022, contracting by billions in recent months.
Tether, the issuer of the dominant USDt stablecoin, reported to Reuters on Friday that it has frozen around $4.2 billion of its tokens linked to suspected illicit activity since 2023.
This aggressive action coincides with heightened scrutiny from global regulators and law enforcement. Consequently, the El salvador-based firm blacklists wallet addresses directly on-chain when requested by authorities.
On Tuesday, Tether announced it helped the US Department of Justice seize nearly $61 million in USDt connected to pig-butchering scams. Earlier in February, it also froze about $544 million for Turkish authorities investigating alleged illegal betting and money laundering.
According to Elliptic, stablecoin issuers had blacklisted around 5,700 wallets holding roughly $2.5 billion by late 2025. Approximately three-quarters of those addresses contained USDt when frozen.
Meanwhile, USDt’s circulating supply is contracting sharply after years of growth. Data indicates the supply fell about $1.5 billion in February following a $1.2 billion drop in January.
Tether attributed the figures to short-term distribution changes rather than weak demand. It noted that Circle‘s competing USDC stablecoin also saw a multibillion-dollar reduction during the same period.
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