Tether’s Battle Against Illicit Addresses

Tether, the issuer responsible for the world's largest stablecoin, has recently taken action against over 30 cryptocurrency addresses that collectively received billions in USDT tokens.

This significant manoeuvre, representing a noteworthy operation for Tether, was executed in collaboration with Chainargos, a prominent blockchain intelligence firm.

The specified addresses had received a total of $161 million from Whitebit, a European cryptocurrency exchange rooted in Ukraine. A substantial number of these addresses were involved in handling STUSDT, a token acquired through USDT staking.

Chainargos had earlier identified multiple wallets engaged in “programmatic spamming” activities, involving small-scale transactions of STUSDT, an observation made as far back as August.

Commencing on December 1, Tether initiated the freezing of 28 of these addresses. Subsequently, on December 2, an additional six addresses were blacklisted for moving over $10 million, equating to approximately $1 million in assets. Most of the frozen wallets were linked to STUSDT transactions.

While Tether has refrained from offering specific rationales for these actions, the stablecoin entity has been collaborating with the U.S. Department of Justice (DOJ) in freezing funds associated with illicit activities. Notably, Tether recently voluntarily froze $225 million connected to human trafficking groups in Southeast Asia, marking it as the “largest-ever freeze of USDT.”

Tether's USDT holds the position of the third-largest cryptocurrency by market capitalization and is extensively utilized for trading and value exchange within the cryptocurrency landscape.

In an earlier instance in November, Tether, alongside Bitfinex, its sister crypto exchange, opted to retract their opposition to a Freedom of Information Law (FOIL) request, spurred by journalists such as Zeke Faux from Bloomberg Businessweek.

In an official statement, the stablecoin issuer conveyed that this decision aligns with their commitment to transparency. However, they clarified that not all documents would be disclosed, citing standard business practices.

Tether levied criticism against Zeke Faux's past work, suggesting deviations from traditional journalistic standards. Additionally, the statement highlighted instances of what they referred to as “biased and factually inaccurate reporting” from several media outlets, including the Wall Street Journal and Bloomberg, whose journalists were involved in the FOIL request.

This is not Tether's initial encounter with a FOIL request; they previously attempted to obstruct a request by CoinDesk seeking documents about Tether's reserves amid an inquiry by the New York Attorney General (NYAG) into the full backing of USDT by reserves. Post a legal defeat, Tether has opted not to pursue an appeal and has agreed to engage with journalists and regulators who uphold ethical reporting standards and respect privacy.