Tether, the company behind the world’s largest stablecoin USDt, has frozen more than $12.3 million worth of digital assets on the Tron Network, signaling a continued effort to crack down on illicit financial activity within the crypto ecosystem.
According to data from Tronscan, the freeze took place at 9:15 am UTC on Sunday. While Tether has not released an official statement, the move appears consistent with the company’s stated efforts to enforce anti-money laundering (AML) and sanctions compliance.
Policy Tied to U.S. Sanctions List
Tether has previously detailed its compliance approach in a March 7 blog post, noting it adheres to a “strict wallet-freezing policy to combat money laundering, nuclear proliferation, and terrorist financing.” The firm also emphasized alignment with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
The latest freeze follows a similar move on March 6, when Tether immobilized $27 million in USDT linked to Garantex, a Russia-based crypto exchange that had been sanctioned by OFAC in April 2022 for violations of AML protocols and regulatory standards.
Garantex Case Highlights Ongoing Challenges
The March freeze ignited backlash from Garantex, which accused Tether of “entering the war against the Russian crypto market” and claimed the frozen funds amounted to more than 2.5 billion rubles ($27 million).
Despite regulatory actions, Garantex has continued to operate. Blockchain analytics firm Global Ledger reported on June 5 that the exchange still maintains more than $15 million in active reserves tied to USDT, raising concerns about the effectiveness of sanctions enforcement within decentralized networks.
Tether’s Growing Role in Global Crypto Compliance
As regulators ramp up scrutiny of crypto platforms, Tether’s asset-freezing powers have become a focal point in the broader conversation around compliance and enforcement. With stablecoins playing a growing role in cross-border finance, the company’s alignment with global financial watchdogs positions it as a key actor in the effort to curb illicit flows in the digital asset space.
