Tether Holdings has frozen $13.4 million worth of its USDT stablecoin distributed across 22 wallet addresses on the Ethereum and Tron networks. The action was first identified by the on-chain monitoring service MistTrack, though Tether has not yet specified the reason for this particular freeze.

The majority of the funds were concentrated in a single Ethereum address, which held approximately $10.3 million in USDT. Another significant address on the Tron network contained about $1.4 million. This move is consistent with Tether’s ongoing efforts to collaborate with law enforcement and prevent the illicit use of its stablecoin.

A Pattern of Enforcement

This isn’t an isolated incident. Throughout the past year, the stablecoin issuer has executed several similar operations. In June 2024, Tether froze over $12.3 million in USDT on the Tron network. A similar freeze occurred in April 2024, when the company blocked nearly $28.7 million across 13 addresses.

One of the most significant enforcement actions this year took place in March, when Tether froze $28 million in USDT held on the Russian cryptocurrency exchange Garantex. These actions highlight the company’s proactive stance in policing its ecosystem for connections to sanctioned entities, fraud, and other criminal activities.

Legal Challenges Emerge

While Tether frames these freezes as necessary for compliance, its methods are facing legal scrutiny. Just a day before this latest freeze, Texas-based Riverstone Consultancy filed a lawsuit against the firm, accusing it of unlawfully freezing $44.7 million in USDT and causing the company to miss significant investment opportunities.

The lawsuit stems from an incident in April 2024 when Tether froze funds in eight of Riverstone’s wallets at the request of Bulgarian police. Riverstone argues that Tether bypassed official international judicial treaties, which require such requests to be handled through designated diplomatic channels. The consulting firm claims that when it tried to contact Bulgarian officials as advised by Tether, it received no response.

Tether maintains that it cooperates closely with global law enforcement agencies, including the U.S. Department of Justice and the FBI, to block funds linked to crime. According to a September 15 press release, the company has frozen over $3.2 billion in USDT tied to illicit activities, collaborating with more than 290 agencies in 59 countries and blocking 3,660 wallets in the last year alone.