Tether, Tron and TRM Labs Help Freeze $126 Million in USDT Linked to Crime

A crime-fighting coalition formed by prominent crypto companies has frozen more than $100 million USDT worth of assets in a bid to ice out criminals from their networks. 

The T3 Financial Crime Unit co-led by Tether, Tron, and TRM Labs is working directly with law enforcement agencies worldwide to “identify and disrupt criminal networks,” the coalition said Thursday in a statement. Their goal is to ensure bad actors cannot exploit stablecoins such as Tether, which criminals have co-opted to launder their ill-gotten gains. 

“T3 FCU’s ability to work closely with law enforcement worldwide to effectively disrupt cybercriminals from using USDT on TRON is a proof of concept for public-private partnerships,” Chris Janczewski, head of global investigations at TRM Labs, said in a statement.

The T3 Financial Crime Unit has monitored over $3 billion USDT in total volume since last August, analyzing millions of transactions across five continents. All told, the group said it has worked with local law enforcement agencies to freeze some $126 million worth of the asset.

Millions of people worldwide use stablecoins—which are backed by and pegged to the price of another asset, such as the U.S. dollar—to hedge against inflation, send remittances, and make other peer-to-peer transfers. However, bad actors are fond of the tokens too. 

Criminals made roughly $40 billion in illicit stablecoin transactions from 2022 to 2023, a report from blockchain data firm Chainalysis shows. At the same time, law enforcement agents and non-governmental organizations are increasingly flagging ties between stablecoin transactions and financial fraud, such as money laundering and sanctions evasion.

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Hackers have grown more sophisticated and continue to rake in billions of dollars from crypto exploits. The good news? There isn’t any—2024 has officially surpassed last year’s totals for stolen funds, with months of hacks piling on to an already record-breaking year.  By Q3 2024, blockchain intelligence firm TRM Labs reported that over $2.2 billion had been stolen in crypto hacks—exceeding the $1.8 billion lost in all of 2023.  Now, as the year comes to a close, the total continues to climb. A...

A United Nations report published in 2024 alleged that USDT transactions facilitated with Tron’s TRC-20 protocol are “a preferred choice” for bad actors. Tron founder Justin Sun refuted the allegations, emphasizing that his team is working to stamp out crime on the blockchain.

Meanwhile, U.S. prosecutors are allegedly probing Tether for possible violations of sanctions and anti-money-laundering rules, the Wall Street Journal reported, citing sources familiar with the matter. Tether CEO Paolo Ardoino has repeatedly denied there's any truth to the allegations.

Edited by Andrew Hayward