Tether, the company behind the popular stablecoin USDT, has announced that it has frozen $225 million worth of USDT that were allegedly linked to a human trafficking group. The freeze was requested by law enforcement agencies, who are investigating the criminal activities of the group.
According to a statement from Tether, the freeze affects 24 addresses that hold a total of 225,000,000 USDT. The company said that it is cooperating with the authorities and that it has a zero-tolerance policy for illicit use of its platform.
Tether is one of the most widely used cryptocurrencies in the world, with a market capitalization of over $70 billion. It is designed to maintain a 1:1 peg with the US dollar and is backed by reserves of fiat currency and other assets. However, Tether has also faced controversy and criticism over its lack of transparency, its susceptibility to manipulation, and its involvement in legal disputes.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
The freeze of $225 million in USDT is not the first time that Tether has taken action against suspected criminals. In 2019, Tether froze $33 million in USDT that were connected to a Ponzi scheme called Plus Token. In 2018, Tether also froze $5.5 million in USDT that were linked to a cryptocurrency exchange called Bitfinex, which was accused of fraud and money laundering.
The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies.
While cryptocurrencies offer many benefits, such as lower transaction costs, faster processing, and greater privacy, they also pose significant challenges for law enforcement agencies. One of these challenges is the use of cryptocurrencies by human traffickers, who exploit them to facilitate their illicit activities and evade detection.
Human trafficking is a global crime that involves the recruitment, transportation, transfer, harboring, or receipt of persons for the purpose of exploitation. According to the United Nations, human trafficking affects every region of the world and generates an estimated $150 billion in profits annually.
Human traffickers use various methods to coerce, deceive, or manipulate their victims, such as violence, threats, fraud, or abuse of power. They also use various means to conceal their identity and operations, such as fake documents, encrypted communication, and money laundering.
Cryptocurrencies provide human traffickers with a convenient and anonymous way to transfer funds across borders and jurisdictions. Unlike traditional financial systems, cryptocurrencies do not require identification or verification of the parties involved in a transaction.
They also do not leave a traceable paper trail that can be used to track the source and destination of the funds. This makes it difficult for law enforcement agencies to identify and locate the perpetrators and beneficiaries of human trafficking, as well as to seize and recover their assets.
Moreover, cryptocurrencies enable human traffickers to access a global network of buyers and sellers of illicit goods and services. Through online platforms such as dark web marketplaces, human traffickers can advertise and sell their victims to customers who pay with cryptocurrencies. They can also use cryptocurrencies to purchase weapons, drugs, or other items that facilitate their criminal activities. These transactions are often conducted through peer-to-peer networks or intermediaries that provide anonymity and security for both parties.
The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies that requires a coordinated and comprehensive response. Law enforcement agencies need to enhance their technical capabilities and skills to monitor and analyze cryptocurrency transactions and networks.
They also need to collaborate with other stakeholders, such as regulators, financial institutions, cryptocurrency service providers, civil society organizations, and international organizations, to share information and best practices. Furthermore, they need to raise awareness and educate the public about the risks and harms of human trafficking and cryptocurrency abuse.
Cryptocurrencies are not inherently evil or illegal. They have the potential to create positive social and economic impacts for many people around the world. However, they also have the potential to be misused and abused by criminals who exploit their features for nefarious purposes. The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies that demands urgent attention and action.
The freeze of $225 million in USDT is a significant development in the fight against human trafficking, which is one of the most heinous crimes in the world. According to the United Nations, human trafficking affects millions of people every year, who are exploited for sexual or labor purposes. Human trafficking is also a lucrative business, generating an estimated $150 billion in annual profits for the traffickers.
The use of cryptocurrencies by human traffickers is a challenge for law enforcement agencies, who have to deal with the anonymity and decentralization of these digital assets. However, the freeze of $225 million in USDT shows that there are ways to track and stop the flow of illicit funds on the blockchain. It also shows that Tether is willing to comply with legal requests and to prevent its platform from being used for evil purposes.