a Tetherthe company issuing the USDT stablecoin reported doing so frozen 225 million USDT this Monday (20). Equal to R$1.1 billionthe amount is said to be linked to an international human trafficking syndicate in Southeast Asia.
The operation was a joint effort with the broker OKX It’s like United States Department of Justice (DoJ). This is the largest freeze ever by Tether, which was happy to help authorities.
According to data from Dune Analytics, Tether has frozen $786 million in USDT (R$3.8 billion) to date. The amount corresponds to 0.9% of the current market value ($87.7 billion).
Tether freezes record USDT
While cryptocurrencies like Bitcoin are decentralized, which does not allow freezing or confiscating funds, Tether (USDT) is a token that can be found on several blockchains such as Ethereum, Tron, and Binance Smart Chain. Therefore, the code of its contract gives the company the ability to have absolute control over its stablecoin balances.
Regarding the $225 million (R$1.1 billion) freeze carried out last Monday (20), Tether explains that the operation was a partnership between Tether, the OKX broker and the US Department of Justice.
In this case, the criminals are accused of both human trafficking and a romance scam known as “pig slaughter.” This scam tricks the victim into depositing money with scammers who pose as an alluring woman with a business opportunity as irresistible as she is.
“Tether has proactively and voluntarily frozen approximately 225 million USDT tokens in self-custodial third-party wallets connected to an international human trafficking syndicate in Southeast Asia responsible for a global romantic ‘pig slaughter’ program.”
The official statement also states that the investigation took months. Data from the chain indicates that the balances of 37 addresses were frozen this Monday (20). In total, more than 1,025 addresses have already undergone this punishment.
Tether CEO Paolo Ardoino explains freeze
Taking to social media, a follower wondered how Tether’s freezing process works and why these USDT are not immediately ‘burned’ by the company. In response to this, Paolo Ardoino explained the process.
First, we have to wait for the government to complete its investigation. However, the frozen money will remain in your spreadsheets until the matter is resolved. Finally, some victims of these scammers may be able to get their money back after the legal process, which in this case can take a long time because many people are involved.
“Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for security in the cryptocurrency space.”says Paolo Ardoino, CEO of Tether. “Our recent partnership with the Department of Justice underlines our commitment to promoting a safe environment. We believe in leveraging technology and relationships, such as our partnership with OKX, to proactively address illegal activity and maintain the highest standards of integrity in the industry.”
When asked if Tether fears competition from decentralized stablecoins, which are not at risk of seizure, Ardoino said that “Competition is always good” It is “May the best product win”. Currently, USDT is 3.5 times larger than its closest competitor, USDCoin (USDC), which also has the power to freeze funds.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.