DOJ Investigates Romance Scammers as Tether Freezes $225 Million USDT

DOJ Investigates Romance Scammers as Tether Freezes $225 Million USDT

Tether (USDT) Freezes $225M in USDT as Part of DOJ Investigation

Stablecoin issuer Tether (USDT) has frozen approximately $225 Million worth of USDT as part of a United States Department of Justice investigation into a Southeast Asian human trafficking syndicate. Tether (USDT) posted on Nov. 20 that it had worked with the DOJ and cryptocurrency exchange OKX to freeze $225 Million worth of USDT in “external self-custodied wallets.” The firm reported that the illicit funds were used by a crime syndicate in charge of a “pig butchering” romance scam.

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According to Tether (USDT), the USDT freezing followed a “months-long investigative effort” into the location of the funds. The stablecoin issuer stated it would work with United States authorities to unfreeze any “lawful” wallets that may have been confiscated as part of the effort.

Tether (USDT) has previously worked with worldwide law enforcement agencies to freeze assets allegedly linked to criminal syndicates. In contrast to  digital currencies such as Bitcoin, stablecoins like USDT are more likely to be announced by a single authority, allowing issuers to freeze funds and halt transactions in response to law enforcement requests.

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Response to Law Enforcement

Cryptocurrency moving through exchanges is sometimes subject to the same treatment. Binance, for instance, restricted account access to $1 Million in cryptocurrency for a Tezos tool contributor following a request from authorities. Similarly, Binance froze accounts linked to Hamas militants in October 2023 in response to Israeli law enforcement.

Hot Take

It is essential to recognize the control that issuers of stablecoins like Tether (USDT) have over their funds and transactions. Working closely with law enforcement agencies, as Tether (USDT) does, can help maintain the integrity and security of the cryptocurrency industry and prevent criminal activities.

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