Tether Freezes $12.3M on Tron Amid Sanctions & AML Concerns

Move Continues Clampdown on Illicit Crypto Activity

World’s largest stablecoin issuer, Tether (USDT), froze over $12.3 million in digital assets on the Tron blockchain network. The move underscores Tether’s ongoing efforts to combat illicit activity within the cryptocurrency space.

Blockchain data from Tronscan confirmed the freeze occurred at 9:15 am UTC on Sunday.

Though Tether has not issued an official statement, the action is widely interpreted as stemming from concerns over potential sanctions violations or Anti-Money Laundering (AML) risks.

Tether actively references the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List explicitly in its operational policies. “Tether enforces a strict wallet-freezing policy to combat money laundering, nuclear proliferation and terrorist financing and is also aligned with the OFAC Specially Designated Nationals (SDN) List,” Tether wrote in a March 7 blog post.

CoinDesk reached out to Tether for comment but reported no response by the time of publication.

Tether freezes $12.3 million USDT. Source: Tronscan

Tether’s asset-freezing powers received renewed attention on March 6 when the company froze $27 million in USDT on the Garantex crypto exchange.

Simultaneously, Garantex halted operations, attributing the shutdown to Tether’s actions against “the Russian crypto market and blocked our wallets worth more than 2.5 billion rubles [$27 million].”

In April 2022, OFAC became the first entity to impose sanctions on Garantex, citing disregard for AML and other regulatory requirements among other violations.

Garantex ETH flows. Source: Global Ledger

Despite the previous freeze, blockchain analytics firm Global Ledger later identified approximately $15 million in active reserves still associated with Garantex as of June 5, reported CoinDesk.

Lazarus-Linked Funds Under Scrutiny

While some decentralization advocates critique Tether’s centralized freezing mechanism, the policy has demonstrably prevented hundreds of millions of dollars worth of illicit funds from entering or remaining within the system.

CoinDesk reported in January 2025 that the joint T3 Financial Crimes Unit (FCU), involving Tether, Tron Network, and TRM Labs, successfully froze assets valued at $126 million solely in its initial six months of operation.

The FCU was established specifically to assist global law enforcement in identifying and freezing illicit cryptocurrency transactions.

The strategic importance of these compliance initiatives was dramatically illustrated by actions against the North Korean state-backed Lazarus Group.

Lazarus, a notorious hacking collective known since 2009, laundered over $200 million worth of stolen crypto between 2020 and 2023. The group had stolen approximately $3 billion in cryptocurrency assets in the six years leading up to 2023.

According to ZachXBT, Tether blacklisted over $374,000 worth of Lazarus-associated funds in November 2023. Furthermore, three out of four stablecoin issuers analyzed subsequently blacklisted an additional $3.4 million found within Lazarus-associated address clusters.