According to Cointelegraph, the world's largest stablecoin issuer Tether announced the freezing of $85,877 USDT, stating that this action is in cooperation with law enforcement. This move has reignited discussions about the role of centralized stablecoin issuers in crypto compliance.
Tether has reported freezing over $2.5 billion USDT related to illegal activities and has cooperated with global authorities to block over 2,090 wallets. Unlike decentralized cryptocurrencies, stablecoin issuers like Tether can freeze funds at the smart contract level.
In November 2023, Tether froze $225 million USDT related to human trafficking and fraud networks in Southeast Asia. In June 2025, Tether froze $700 million USDT associated with Iranian entities.
Tether's actions have raised concerns about its role as a financial enforcement tool. Critics argue that this could lead to outcomes similar to central bank digital currencies, undermining the financial sovereignty and decentralized value of cryptocurrencies.