In a strong move to combat illicit use of digital assets, Tether has frozen $12.3 million worth of USDT on the Tron network. The freeze occurred on Sunday at 9:15 AM UTC, according to data from Tronscan. While there’s been no official statement yet from Tether, the freeze appears linked to suspicious wallet activity possibly violating anti-money laundering (AML) regulations or international sanctions.

Tether Takes a Hard Line on Compliance

Tether has long aligned its compliance practices with global regulators, especially the U.S. Treasury’s OFAC sanctions list. This latest action reinforces the company's aggressive stance on stopping bad actors from misusing stablecoins.

Paolo Ardoino, Tether’s CEO, has emphasized the firm's commitment to transparency and accountability, noting that its capacity to freeze USDT tied to illicit activity is a crucial difference between stablecoins and traditional fiat or fully decentralized cryptocurrencies.

T3 Crime Unit Cracking Down

The freeze is part of an ongoing collaboration between Tether, the Tron network, and blockchain intelligence company TRM Labs. Their joint task force—called the T3 Financial Crime Unit—has already frozen over $100 million in criminal assets during the last four months of 2024 alone. According to TRM Labs, illicit crypto volume represented just 0.4% of all transactions last year, signaling improved industry oversight.

“Tether enforces a wallet-freezing policy targeting money laundering, terrorist financing, and sanctioned individuals,” the company stated, reiterating its support of the OFAC Specially Designated Nationals (SDN) List.

Spotlight on Garantex

This isn’t Tether’s first big freeze. Back in March, it halted $27 million USDT on the Garantex exchange, a Russian-linked platform that had already come under sanctions by both OFAC and the European Union. Garantex claimed the freeze was part of a larger crackdown on the Russian crypto space, saying over 2.5 billion rubles in user assets were affected.

Garantex's services remain suspended, and its website is under maintenance. But as of June 5, blockchain firm Global Ledger reported that $15 million in reserves tied to Garantex were still active—showing that more enforcement may be on the way.

Tether vs Lazarus and Other Threat Actors

Tether’s enforcement role is also crucial in targeting cybercriminal groups like North Korea’s Lazarus Group, which laundered over $200 million in stolen crypto between 2020 and 2023. Blockchain sleuth ZachXBT reported that Tether froze over $374,000 in assets tied to Lazarus in late 2023. Three other stablecoin issuers reportedly blacklisted another $3.4 million connected to the group.

Beyond Compliance: Strategic Investments

Tether isn’t just cracking down on crime—it’s also expanding its portfolio. On June 12, the company acquired nearly 32% of Elemental Altus Royalties, a Canadian gold royalty firm. The $89.4 million deal strengthens Tether’s position in hard assets, complementing its ongoing interest in Bitcoin as part of a long-term strategy to stabilize its reserves and hedge against volatility.

The purchase includes over 78 million shares at CAD 1.55 ($1.14) each, purchased from La Mancha Investments. Tether says it aims to integrate real-world value into its ecosystem to support a more

resilient digital economy.