We and Tether, the largest company in the cryptocurrency ecosystem, today announced that we have collaborated with the United States Department of Justice (DOJ) in an investigation that led to Tether proactively and voluntarily freezing approximately 225 million in USDT tokens in external self-custodied wallets linked to an international human trafficking syndicate in Southeast Asia responsible for a global “pig butchering” romance scam.
The joint investigation was conducted using tools from blockchain analysis firm Chainalysis, and the action by Tether represents the largest-ever freeze of USDT in history.
During our months-long investigative effort with Tether, the U.S. law enforcement agencies, including the DOJ, were proactively alerted to the location of the illicit funds by analyzing the flow of those funds through the blockchain. These actions prompted the initiation of a freeze request by the United States Secret Service and a voluntary freeze by Tether. The frozen wallets are on the secondary market and are not associated with Tether’s customers. To the extent lawful wallets were captured by this operation, Tether will work quickly with law enforcement and the owners of those wallets to unfreeze them, as appropriate.
The proactive measures by the two firms is an example of how cryptocurrency industry players can work together with global law enforcement agencies to effectively deter criminal use. The transparency of blockchain transactions serves as a powerful deterrent to illicit activities, setting a significant precedent for the industry.
In a dedicated effort to maintain industry integrity, Tether follows stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols, in line with the Bank Secrecy Act and the best practices of financial institutions. Additionally, Tether's compliance team conducts thorough enhanced due diligence screenings for all applicants, cross-referencing them against the sanctions databases of the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC). This measure allows Tether to avoid engaging with sanctioned individuals, entities, or deposit addresses. Further, Tether collaborates with global law enforcement in the furtherance of the prevention of unlawful actions through the investigation of suspicious transactions on the secondary market.
Tether remains committed to expeditiously collaborating with law enforcement and affected wallet owners to swiftly resolve concerns regarding lawful wallets captured by these freezes.
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