Tether has frozen funds held in every TRON wallet recently identified by US authorities as part of an expanded sanctions action against Islamic State Khorasan Province (ISIS-K), placing stablecoin issuers once again at the centre of efforts to disrupt terrorist financing through cryptocurrency.
The latest action follows an update by the US Treasury's Office of Foreign Assets Control (OFAC), which added 134 cryptocurrency wallet identifiers linked to ISIS-K.
The list includes 131 wallets on the TRON blockchain and three on Monero, according to blockchain analytics firm Chainalysis.
Chainalysis said the designated TRON wallets had received more than $1.4 million since 2023 and sent out over $880,000 during the same period.
Several of the wallets transferred funds to crypto exchange services based in Syria, while a wider network of associated addresses showed interactions with mainstream crypto platforms.
The analytics firm also revealed that ISIS-K's media division, al-Azaim Media Foundation, had actively sought cryptocurrency donations through websites and messaging applications.
According to Chainalysis, support campaigns linked to the group have historically relied on numerous small donations rather than a handful of large transfers.
The report read,
"Chainalysis has collected historical donation addresses on Tron, Monero, and Bitcoin."
ISIS-K, the Afghanistan and Pakistan branch of the Islamic State, was first designated as a Specially Designated Terrorist Group by OFAC in September 2015.
The latest sanctions update comes only weeks after US authorities targeted Syrian money service businesses accused of helping ISIS financiers convert digital assets into cash.
Earlier enforcement efforts also included sanctions against Maldives-based operative Ali Shafiu in 2023 after investigators found that his TRON wallet had interacted with deposit addresses connected to Iranian exchanges.
Chainalysis said the new designations require virtual asset service providers and financial institutions to immediately update their sanctions screening and transaction monitoring systems.
The company has already labelled the newly sanctioned wallets across its products to help compliance teams identify exposure to the addresses and related networks.
The latest freeze adds to a growing list of actions taken by Tether to curb illicit activity involving its USDT stablecoin.
The company's T3 Financial Crime Unit, a joint initiative involving Tether, TRON and TRM Labs, has frozen more than $450 million in suspected illicit crypto assets since launching in September 2024.
Earlier this year, Tether reportedly froze more than $514 million across 370 addresses in a single 30-day period, with most of the blocked funds located on the TRON network.
Data from blockchain security firm BlockSec also showed that Tether blacklisted 4,163 addresses in 2025, freezing approximately $1.26 billion across Ethereum and TRON.
The company is also facing legal questions over frozen assets.
Victims holding terrorism-related judgments in the United States have asked a New York court to hand over 344,149,759 USDT held in two OFAC-blocked TRON wallets allegedly linked to Iran's Islamic Revolutionary Guard Corps.
The sanctions action comes as TRON itself records unprecedented network activity.
Data from blockchain analytics platform Lookonchain showed that the blockchain reached new all-time highs in June, recording 26.97 million active accounts and 385.77 million transactions.
The figures point to continued demand for the network, particularly for stablecoin transfers.
TRON has become one of the most widely used blockchains for USDT transactions due to its low fees and fast processing times, making it especially popular in regions with high inflation and limited access to banking services.
Growth in decentralised finance applications and blockchain-based gaming projects may have also contributed to the rise in user activity.
While critics continue to raise concerns about the network's level of centralisation and the influence of founder Justin Sun, TRON's ability to process nearly 400 million transactions in a single month highlights its growing role in global digital asset transfers.
At the same time, the latest sanctions case shows how the network's popularity for low-cost payments has also made it an important battleground for efforts to track and disrupt illicit financial activity.
Tether has reportedly invested $20 million in Argentine neobank Ualá, marking the latest move in the stablecoin issuer's accelerating push to expand its footprint across Latin America's financial sector.
XingChiBolivia is moving closer to bringing Tether's USDT stablecoin into its national payments system, as authorities weigh broader use of digital dollars even while the country remains under international scrutiny for anti-money laundering controls.
XingChiThailand is escalating its fight against illicit finance by placing stablecoins under the same level of scrutiny as cash, foreign exchange and gold, signaling that digital dollars have become a key focus of the country's campaign against its underground economy.
XingChiThailand is introducing tougher checks on large cash deposits and investigating high-value USDT trades to tackle money laundering. Anyone depositing 5 million baht (US$150,000) or more in cash may soon need to prove where the money came from.
WeatherlyRevolut has announced to its customers that the platform will be blacklisting Tether's USDT and will be removing the USDT stablecoin from the platform, starting from the end of August this year.
XingChiBolivia has abandoned its fixed exchange rate against the US dollar after roughly 15 years, marking one of the country's biggest monetary policy shifts in more than a decade.
XingChiTwo men were convicted in London for carrying out arson attacks on properties and a car linked to UK Prime Minister Keir Starmer after being recruited online by a handler known as “El Money”. Investigators say they were offered payment in cryptocurrency, with the attacks coordinated through Telegram and linked to wider concerns about online criminal networks.
WeatherlySouth Korean authorities have charged 23 people and detained two key suspects over an alleged crypto money-laundering operation tied to a Cambodia-based phishing syndicate, exposing the financial networks that continue to power Southeast Asia's sprawling scam economy.
XingChiIran’s Nobitex exchange moved at least $2.3 billion through Tron and BNB Chain since 2023, according to a Reuters investigation. The report also highlighted indirect links between the networks and crypto figures tied to the Trump family’s World Liberty Financial project.
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