Tether Halts $5.2 Million in USDT Connected to Phishing Scams

On May 14, a stablecoin issuer, Tether, froze USDT in the value of $5.2 million associated with phishing scams. The USDT has been stored in 12 Ethereum wallets labeled "USDT Banned Address".

The chief security officer of on-chain analytics firm Slomist said the addresses were being used to wash funds from phishing scams.

Tether, the world's largest issuer of stablecoins, has frozen billions of dollars of assets linked to hacks, exploits, and scams. In a tweet, CEO Paolo Ardoino said the firm had blocked over $1.3 billion since inception, with about $1.6 million linked to terrorist finance.

In January 2022, Tether put three Ethereum addresses containing over $150 million worth of USDT on a blacklist. In October 2022, it froze $8.2 million of USDT on Ethereum and blacklisted 215 addresses of Ethereum-based USDT.

As of late 2022, Tether had frozen over $360 million worth of assets. This October, the stablecoin's issuer froze $817,000 USDT associated with terrorist activities in Ukraine and Israel. The same month, it froze $225 million worth of USDT associated with romance scammers.

The stablecoin issuer has worked with 24 law enforcement agencies across 40+ different countries. The firm has cooperated on 198 requests by different law enforcement agencies to block wallets in the last 12 months and 339 in the last 3 years.

Tether also provided secondary market monitoring that would halt activity associated with the people who were sanctioned in the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN). On the list are included any company or individuals controlled or owned by sanctioned countries. Decentralized ledger technology allows crypto firms to monitor funds on-chain. On the other hand, the centralized nature of stablecoins allows issuers to freeze assets linked to illicit activities at the behest of law enforcement agencies.

Cointelegraph has reached out to Tether for comment on the nature of these banned addresses and which phishing scams they were linked to but had not received a response by the time of publication.