Stablecoin issuer Tether has frozen approximately 5.2 million USDT from addresses believed to be operated by phishing scammers.
SlowMist, a blockchain analysis store reported Twelve Ethereum addresses with Tether (USDT) holdings disabled were involved in the freeze. Each wallet was labeled a “USDT banned address,” and SlowMist security researchers said the funds appeared to be associated with an on-chain criminal organization.
Phishing is rampant in the cryptocurrency space, with malicious actors mimicking legitimate platforms or dapps to steal private keys and compromise wallets.
Fraudsters continue to launch attacks, but security experts point out that users and platforms have developed strong defenses against these scams. Last month saw the lowest losses from fraud and phishing hacks since 2021, according to CertiK. According to the report, malicious actors were only able to steal $25.7 in April.
Tether’s centralization could help combat illicit wealth
Freezing stolen cryptocurrency assets has proven difficult, as decentralized companies are typically able to adopt models that resist excessive censorship. In cases like these, Tether’s centralized structure can help prevent criminal activity.
This is not the first time a stablecoin issuer has intervened. In March, Tether blacklisted four addresses holding more than $20 million USDT as part of a backlash against the criminal use of stablecoins.
The company has pledged to step up its operations against illegal activities following UN claims alleging negligence by USDT operators. Tether also confirmed its intention to expand its focus on illicit cryptocurrency transactions conducted through stablecoin channels in a letter to US lawmakers.