By
Chimamanda U. Martha
July 2nd, 2024
A Tether spokesperson stated that the decision to block addresses using USDT to purchase oil from PDVSA is part of the company’s commitment to preventing payments linked to the OFAC sanctioned entities.
Leading global stablecoin issuer Tether has once again taken action against crypto wallets suspected to be involved in money laundering and other illegal activities, including violating sanctions imposed by federal governments. On May 14, blockchain security platform MistTrack announced that the company had frozen $5.2 million in the USDT stablecoin belonging to 12 addresses. These addresses were identified as “USDT banned addresses” by MistTrack, suggesting their involvement in prohibited activities.
Suspicion of Money Laundering
Another blockchain security company SlowMist has suggested that the frozen addresses could be linked to money laundering activities. However, Tether has not yet issued an official statement regarding the seizure.
Last year, TRM Labs, a blockchain analysis company that works with law enforcement agencies in the United States, labeled Tether’s USDT as a “currency of choice” for terrorist financing, prompting Tether to strengthen its compliance measures.
In response, the stablecoin issuer reiterated its commitment to work closely with law enforcement agencies globally to combat crypto-funded terrorism and warfare.
Since then, Tether has been actively blocking suspicious addresses from using its USDT to commit crimes and evade government sanctions.
In April, Tether announced its decision to block wallet addresses using its stablecoin to circumvent sanctions on oil exports in Venezuela. The action followed reports that Venezuela’s state-owned oil firm PDVSA intended to use USDT to bypass new US sanctions on its oil sector.
The Venezuelan firm has been using digital assets to run its operations for over a year but plans to increase its usage now to manage the economic challenges imposed by the sanction.
A Tether spokesperson stated that the decision to block addresses using USDT to purchase oil from PDVSA is part of the company’s commitment to preventing payments linked to the Office of Foreign Assets Control (OFAC) sanctioned entities.
Past Actions Against Illicit Activity
In the past, Tether has blacklisted several crypto wallets linked to illicit activities.
Last year, the company froze 32 wallets containing $873,118.34, which were found to be involved in illicit activity in Israel and Ukraine. This move came after Israeli police froze crypto accounts used to solicit donations for Hamas on social media following an attack that killed 1,300 people on October 7.
That same year, the company blacklisted 160 crypto wallets linked to OFAC sanctioned list. However, out of the 160 addresses, only few held its USDT stablecoin valued around $3.9 million.
Later in 2022, Tether froze an Ethereum address containing over $1 million of USDT and other cryptocurrencies, marking the highest amount seized from a single address to date. However, apart from confiscating addresses, Tether has also assisted in recovering funds from hackers exploiting vulnerabilities in the crypto market for personal gain.