Tether's T3 Financial Crime Unit has frozen over $450 million in illicit cryptocurrency since 2024, with intercepted proceeds increasing by 43.9% in 2025, according to the latest data from CoinMarketCap. The initiative has now expanded to work alongside law enforcement agencies across 23 countries to combat crypto-related financial crimes, demonstrating the company's expanded global capabilities in combating criminal activity. As reported by CoinMarketCap, the unit has targeted a wide range of criminal activity including terrorist financing, exchange hacks, drug trafficking, extortion, kidnappings, and North Korea-linked operations.
The enforcement efforts come as global illicit crypto flows reached a record $158 billion last year, highlighting the increasing scale of financial crime within the digital asset ecosystem, according to TRM Labs. Officials stated that the task force can freeze suspicious crypto funds within 24 hours and has already supported major investigations in countries including the United States, Germany, Spain, Brazil, and the United Kingdom. The partnership has also been recognized by the Financial Action Task Force for its role in improving global cooperation against crypto-related crime.
Attorney Charles Gerstein filed a claim in Manhattan federal court Thursday seeking to force Tether to transfer 344,149,759 USDT, roughly $344 million, frozen at two Tron wallet addresses designated by OFAC as belonging to Iran's Islamic Revolutionary Guard Corps. According to reports from CoinDesk, the plaintiffs are asking the Southern District of New York to compel Tether to zero out the blocked wallets and reissue an equivalent amount of USDT to a wallet controlled by their counsel.
Gerstein's filing argues that because Tether already immobilized the funds in response to OFAC's sanctions designation of the two Tron addresses, the company has demonstrated both the technical capability and the practical willingness to act unilaterally on those holdings. As reported by CoinDesk, the plaintiffs hold billions of dollars in unpaid U.S. court judgments tied to Iranian-backed terrorism, now arguing that the frozen USDT constitutes blocked property of a state sponsor of terrorism, making it subject to execution under federal law.
The case centers on Tether's unique administrative controls over USDT, which include the ability to freeze wallets, blacklist addresses, zero out balances, and reissue tokens to new destination addresses. According to CoinDesk, Tether has already frozen $4.2 billion in USDT across more than 5,000 wallets linked to criminal activity and assisted the DOJ in seizing over $6 million connected to a Southeast Asian fraud scheme. The plaintiffs argue this precedent demonstrates Tether's established capability to redirect existing freezes toward different destinations.
The filing represents a direct expansion of Gerstein's earlier litigation targeting frozen funds in the North Korea-linked Arbitrum case and separate claims against Railgun DAO. As reported by CoinDesk, the legal precedent being constructed here is that administrative control over an asset is functionally equivalent to possession, and that possession creates liability to judgment creditors under the right statutory framework. This could potentially rewrite stablecoin law by treating administrative controls as equivalent to actual possession.
