Home Editor's Pick Tether Cracks Down on Phishing: $5.2 Million in USDT Frozen

Tether Cracks Down on Phishing: $5.2 Million in USDT Frozen


Tether (USDT), the world’s leading stablecoin issuer, recently made a decision to freeze $5.2 million worth of USDT, which was tied to phishing scams.

The move comes amid a debate between Tether and Ripple.

The frozen funds were located in 12 Ethereum wallets that were flagged as “USDT Banned Address,” according to on-chain analytics firm SlowMist. As reported, the flagged wallets were being used to launder money obtained from phishing scams.

It Isn’t A Free For All!

It’s not the first time Tether has demonstrated proactive steps to ensure regulatory compliance and safeguard users against fraud. The firm has consistently performed similar acts over the past few years. It’s estimated that Tether has frozen over $1 billion in assets, targeting a wide range of illicit actions, including hacks, exploits, and scams.

In January 2022, Tether made headlines by blacklisting three Ethereum addresses holding over $150 million worth of USDT. Later that year, in October, Tether froze $8.2 million in USDT on Ethereum and blacklisted 215 Ethereum-based USDT addresses. By the end of 2022, Tether’s asset-freezing efforts amounted to a staggering $360 million.

Last October, the firm once again demonstrated its commitment to combating illicit activities by freezing $817,000 in USDT linked to terrorist activities in Ukraine and Israel. Just a month later, Tether intervened to freeze $225 million in USDT connected to romance scammers.

Also, over the past year, Tether has collaborated with 24 law enforcement agencies across more than 40 countries. During this period, they have successfully processed 198 requests to block wallets associated with illicit activities.

In addition to addressing requests to freeze funds, Tether provides secondary market controls that enable them to freeze any transactions linked to individuals and entities listed on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals list.

Earlier this month, Tether announced its partnership with leading blockchain analysis firm Chainalysis to create a custom set of tools to monitor the secondary market.

According to the US Department of Justice (DOJ), cryptocurrency is the preferred payment method for ransomware and other digital extortion activities.

US Senator Elizabeth Warren has recently called on US law enforcement agencies to crack down on crypto payments for child sexual abuse material (CSAM). According to Chainalysis, cryptocurrency has become the key payment method for CSAM content.

However, while Tether has shown efforts to comply with regulatory requirements, the company’s actions have sparked controversies. Some argue that the ability of stablecoin issuers to freeze funds for anti-fraud purposes somewhat contrasts with the neutralized nature of cryptocurrency.

Tether And Ripple Clash

And despite Tether’s ongoing work with regulators, Brad Garlinghouse, CEO of Ripple, doesn’t think it’s enough to help the company escape the US government’s scrutiny. Speaking in a recent podcast, Garlinghouse said US lawmakers are taking measures against the world’s largest stablecoin company.

According to him, the crackdown could bring serious harm to the entire cryptocurrency market. He linked it to one of the worst scenarios – the black swan. He claimed that the US government placing Tether in its sights could be the main factor leading to this event.

In response, Tether’s CEO Paolo Ardoino countered that Ripple was spreading FUD about USDT to create opportunities for the stablecoin it is building. In April, Ripple announced plans to issue new stablecoins.

Its coming product, however, has already been targeted by the US Securities and Exchange Commission (SEC). The SEC suggested in a recent filing that Ripple’s stablecoin is an unregistered security.

Garlinghouse’s statement was made amid concerns that Tether is being used by terrorist organizations and embargoed countries like Russia to circumvent US economic sanctions.

US Senate Banking Committee, Adewale Adeyemo, US Deputy Secretary of the Treasury, previously noted that Russia has switched to using payment alternatives, like USDT, to circumvent sanctions.

The post Tether Cracks Down on Phishing: $5.2 Million in USDT Frozen appeared first on Blockonomi.

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