DOJ Probe Spurs Tether’s $225M Freeze
Tether, a prominent player in the cryptocurrency sphere, has joined forces with the global crypto exchange OKX and the U.S. Department of Justice (DOJ) to voluntarily freeze an estimated $225 million in USDT tokens amidst an ongoing probe. This move signifies the most substantial freeze of USDT to date. The frozen wallets are part of the secondary market and have no connection to Tether’s clientele.
Both Tether and OKX have shown their dedication to collaborating with worldwide law enforcement agencies to prevent illicit use within the crypto realm. Tether adheres to rigorous Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols, per the Bank Secrecy Act and the best practices of financial institutions. The firm is committed to promptly working with law enforcement and the owners of affected wallets to address any concerns regarding lawful wallets caught up in these freezes.
Tether halted $225 million on 20 November 23 in its currency in response to a U.S. Department of Justice investigation targeting a Southeast Asian human trafficking syndicate. The collaborative effort involves Tether, OKX, the Justice Department, and U.S. law enforcement agencies.
This action aligns with Tether’s past account freezes for justifiable reasons. Notably, it restrained three Ethereum addresses holding over $160 million in USDT, rendering them incapable of fund movement. Over time, Tether has blacklisted 563 addresses on the Ethereum blockchain since November 2017, reflecting its commitment to compliance and mitigating illicit activities.
The joint investigation was conducted using tools from blockchain analysis firm Chainalysis. This investigation led to Tether, the issuer of a stablecoin, taking the unprecedented step of freezing approximately $225 million in USDT tokens. This means that the owners of these wallets will not be able to move their funds until the freeze is lifted. This freeze was implemented as part of Tether’s commitment to cooperate with law enforcement agencies and regulators to monitor suspicious activities and deter criminal use within the crypto space. However, further details about the case have not been disclosed.
Collaboration with Law Enforcement
The collaboration with law enforcement in this case showcases how entities within the cryptocurrency industry can effectively work together with global law enforcement agencies to deter criminal activities. Paolo Ardoino, the CEO of Tether, highlighted their proactive engagement with global law enforcement agencies and their commitment to transparency, intending to set a new benchmark for safety within the crypto space.
OKX, a significant player in this investigation, also emphasized the importance of collaboration. Jason Lau, OKX’s Chief Innovation Officer, underscored the value of working together with industry stakeholders, including law enforcement agencies, as a fundamental aspect of their approach to building trust and serving the public good as a leader in the crypto industry.
In conclusion, Tether’s recent actions demonstrate its commitment to maintaining integrity within the cryptocurrency ecosystem. The company’s collaboration with global crypto exchange OKX and the U.S. Department of Justice in freezing approximately $225 million in USDT tokens amid an ongoing investigation into an international human trafficking syndicate is a testament to this commitment. This unprecedented action, facilitated by tools from blockchain analysis firm Chainalysis, underscores the potential of cryptocurrency industry players to work together with global law enforcement agencies to effectively deter criminal use.