Tether's USDT Freeze Gives FBI a Direct Custody Route

US prosecutors filed a civil forfeiture complaint on Sept. 14 targeting 61.2 million USDT across 10 Tron addresses. The filing seeks to convert on-chain identification into direct government custody without obtaining private keys, a shift that relies on Tether's control over the token.

The tokens were already immobilized. Tether froze seven of the targeted addresses in June 2025 and another three in July. According to the complaint, a seizure warrant issued this week authorizes federal agents to move the value into government custody by having Tether burn the frozen tokens and issue replacements for transfer to an FBI-controlled hardware wallet.

This mechanism extends a growing enforcement relationship between US agencies and the stablecoin issuer. The Justice Department acknowledged Tether’s help in a distinct matter concerning over $52 million tied to Xinbi Guarantee shortly prior to the Iran filing. More than 340 law-enforcement agencies in 67 countries have collaborated with Tether, which assisted in freezing over $5 billion connected to suspected illicit activity.

The $61 million seizure represents a fraction of the wider network prosecutors described. “Entity A” was a cluster of at least seven interconnected addresses that handled more than $1.5 billion in proceeds from alleged Iranian oil sales, both receiving and distributing the funds. The network touched conventional US banking channels, with one unnamed company sending approximately $37.15 million to Hexa Whale in March and April 2024, and another $443.49 million to Blessed Trust between November 2024 and March 2025. Richard Teng, CEO of Binance, stated: “This case was not filed against Binance and does not allege any wrongdoing by Binance.” He noted the exchange has “zero tolerance” for sanctions violations and had cooperated with law enforcement since the matter was first raised.