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Tether voluntarily freezes $225M linked to human trafficking

Tether voluntarily freezes $225M linked to human trafficking

The leading global stablecoin company, Tether, voluntarily froze approximately $225 million worth of USDT tokens held in external self-custody wallets. 

The funds were linked to an international criminal syndicate involved in human trafficking and a global “pig butchering” scheme, the firm revealed in its press release from Monday, November 20.

“Pig butchering” is the type of scam in which the scammer slowly builds a relationship with a victim before using emotional manipulation to convince the victim to send them money, cryptocurrencies, join them in a fraudulent investment scheme, or commit other similar activities to the benefit of the scammer.

The decision to freeze the USDT comes after a months-long investigation conducted by various players in the cryptocurrency industry, including Tether and the crypto exchange OKX, and law enforcement agencies such as the U.S. Department of Justice (DOJ).

Tether’s announcement also highlighted that the investigation was largely carried out using blockchain analysis tools from Chainalysis.

The CEO of Tether, Paolo Ardoino, highlighted that the proactive approach by his company and OKX, as well as the voluntary freezing of stolen tokens, showcases how the transparency of blockchain can help detect and prevent illicit activity. 

Through proactive engagement with global law enforcement agencies and our commitment to transparency, Tether aims to set a new standard for safety within the crypto space. Our recent collaboration with the Department of Justice underscores our dedication to fostering a secure environment.

Ardoino stated and reaffirmed his firm’s and OKX’s commitment to upholding the highest standards of integrity:

We believe in leveraging technology and relationships, such as our collaboration with OKX, to proactively address illicit activities and uphold the highest standards of integrity in the industry.

Tether has been maintaining its proactive approach for some time. In mid-October, Finbold reported on how the stablecoin company, following a major investigation, froze more than 30 addresses containing approximately $870,000 linked to illicit activity in Ukraine and Israel.

Additionally, Tether has so far worked with at least 31 agencies in at least 19 countries and has cumulatively frozen nearly $1 billion linked to various criminal activities.

The most recent news comes as several major institutions have taken a more active role in the prevention of crypto-related crime. Last week, Lloyds bank, for example, published an urgent notice pointing out a recent uptick in the number of scams targeting younger victims, along with the guidelines on how its customers can better protect themselves. 

Around the same time, the blockchain security firm SlowMist also issued a notice on a new type of crypto scam where the scammers pose as journalists in an effort to convince their victims to let malicious programs run amok on their devices.

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