365Crypto
Billions Locked in Three Years
Tether has frozen $4.2 billion in USDT over three years.
Most of the blocked funds were linked to fraud and laundering cases.
The company acted after requests from regulators and law enforcement agencies investigating crypto scams and sanctions evasion.
Authorities now rely on stablecoin issuers to stop suspicious transfers before funds disappear across borders and exchanges.
Stablecoins Under Pressure
USDT is the largest stablecoin in the market today.
More than $180 billion worth of tokens are currently in circulation.
That figure has grown sharply from around $70 billion just three years ago, showing how central stablecoins have become to trading and payments.
When authorities flag a wallet, Tether can blacklist the address directly on the blockchain and freeze the tokens inside it.
Stablecoin: a cryptocurrency designed to maintain a stable value, usually pegged to a fiat currency like the US dollar.
Working With Governments
This week, Tether helped the US Department of Justice seize $61 million tied to so-called pig-butchering scams.
In these scams, criminals build trust with victims before convincing them to send crypto funds.
Earlier this month, Turkish authorities requested the freezing of $544 million connected to alleged illegal betting and laundering networks.
Blockchain analytics firms report that thousands of wallets have been blacklisted, most of them holding USDT at the time of restriction.
Blacklisting: blocking a wallet address from moving funds on the blockchain.
Supply Shrinks Again
At the same time, USDT supply is falling.
Circulating supply dropped by about $1.5 billion in February after a $1.2 billion decline in January.
This marks the largest monthly contraction since the FTX collapse in late 2022 and may signal tighter liquidity across crypto markets.
Tether says the shift reflects short-term distribution changes, not falling demand, and notes that USDC also saw a multibillion-dollar decline during the same period.
Liquidity: the ease with which assets can be bought or sold without affecting price.
