Tether, the issuer of the USDT stablecoin, is facing renewed scrutiny over its role in combating financial crime after investigations found that at least $1.4bn in USDT passed through a crypto wallet linked to scams, hacks and human trafficking networks.
According to blockchain analyses cited by the International Consortium of Investigative Journalists, the wallet is associated with the Huione Group, which has been targeted by the US Treasury Department for laundering billions of dollars, including funds linked to North Korean hackers and organised crime groups.
Despite US authorities moving to cut Huione off from the US financial system, the wallet continued to move large volumes of USDT in the months that followed. Blockchain tracing experts said the address transmitted at least $1.4bn in USDT in the weeks after Huione was publicly identified as a money laundering entity.
As the issuer of USDT, Tether has the technical ability to freeze tokens by blacklisting wallet addresses. Critics, including law enforcement officials and anti-scam advocates, have questioned whether the company should have acted more aggressively to block the funds.
Tether said it cooperates with law enforcement globally and freezes assets when legally required. The company said decisions to freeze wallets are made in coordination with authorities and warned that unilateral action could interfere with ongoing investigations or lock legitimate users’ funds.
The investigation also highlighted cases in which scam victims contacted Tether seeking help recovering stolen assets. In several instances, USDT linked to those cases was traced to the same Huione-controlled wallet, according to multiple blockchain analysis firms, including Chainalysis and TRM Labs.
Tether said it cannot comment on third-party analytics claims or active law enforcement cases. The company added that it conducts due diligence on direct customers but does not continuously assess all token holders once USDT enters general circulation.
The scrutiny comes amid wider global efforts to regulate stablecoins. In the US, new legislation has affirmed that stablecoin issuers must comply with anti-money laundering rules, while international bodies continue to assess the risks posed by digital dollar tokens.
Tether has said it remains committed to combating illicit activity and has partnered with analytics firms and blockchain networks to identify and freeze criminal assets. A joint initiative with TRON and TRM Labs said it has frozen more than $300m in criminal assets to date.
The findings underscore ongoing challenges in policing stablecoin use as USDT remains deeply embedded in global crypto markets and cross-border payment flows.
