Tether details $4.2B USDT freezes since 2023

• Lyla Velez
• February 28, 2026
• News
• 0 Comments

Key Points:

• Tether froze $4.2B USDT over three years amid compliance scrutiny.
• TRM Labs: $19.3B in 2023 USDT transactions tied to illicit activity.
• Address-level blacklisting hits flagged wallets; ordinary users transact normally, slowing cash-outs.

As reported by ForkLog, Tether froze about $4.2 billion in USDT over roughly three years amid intensifying scrutiny of crypto-linked illicit flows and sanctions exposure. The company framed the actions as part of stablecoin compliance and cooperation with global law enforcement.

Based on data from TRM Labs, USDT featured prominently in illicit crypto activity in 2023, with $19.3 billion in transactions tied to USDT illicit activity. The frozen total does not equal the size of illicit flows; blacklisting prevents further on-chain movement but may not restore funds already off-ramped.

Operationally, freezes target specific addresses rather than the token itself, so ordinary users can transact normally. The immediate impact lands on wallets identified through investigations, analytics screening, and formal requests, which can reduce the speed and scale of cash-outs by suspected networks.

How USDT freezes work and who authorizes them

USDT freezes are on-chain blacklists executed by the issuer at the token contract level across supported networks. Triggers typically include law-enforcement requests, court orders, or sanctions-screening results, and actions can propagate quickly across venues once centralized issuers and major exchanges coordinate.

Tether leadership has emphasized speed as a differentiator compared with traditional rails. “When [criminals are] finally trying to use blockchain and move money in USDT … we see them and we freeze them,” said Paolo Ardoino, CEO of Tether, noting the action can occur in as little as 15 minutes from the issuer’s side.

Regulatory baselines are tightening. As reported by CoinDesk, Europe’s MiCA framework and proposed U.S. laws could require stricter reserve disclosures, more frequent assurance, and clearer governance for freeze authority, potentially increasing compliance costs and reporting cadence for stablecoin issuers.

Notable enforcement cases and what they show

In 2023, Tether moved swiftly against a large “pig-butchering” fraud network; TechCrunch reported the issuer blocked about $225 million linked to the scheme, illustrating how centralized control can rapidly immobilize suspected proceeds before they disperse.

Multi-agency coordination has been central in Asia-Pacific enforcement. According to The Block, Chainalysis worked with Tether, Binance, OKX, and local police to help freeze nearly $50 million in USDT tied to a regional pig-butchering operation, underscoring the role of analytics and exchange compliance teams.

Authorities have also used issuer freezes against organized gambling and laundering pipelines. FinanceFeeds reported that earlier this month Tether froze approximately $544 million at the request of Turkish authorities, demonstrating cross-border cooperation and the reliance on formal legal process.

Collaboration has scaled with geopolitical enforcement priorities. The Guardian noted Tether said it had blocked more than $3.4 billion in illicit funds in coordination with over 300 agencies across 62 countries by late 2025, a trajectory consistent with the latest $4.2 billion total and sustained law-enforcement engagement.

At the time of this writing, broader market sentiment remains mixed; Simply Wall St reported Coinbase Global last closed at US$175.95 after a recent decline, a reminder that headline enforcement and trading activity often move in tandem but are not determinative for valuations.