Stablecoin issuer Tether has frozen millions in USDT connected to wallets used by a Gaza-based money transfer network accused of financing terrorism. The move came as part of a broader U.S. Department of Justice enforcement action targeting digital assets tied to terrorist groups.
- Tether assisted the U.S. Department of Justice in cracking down on millions in crypto tied to wallets used for terror financing.
- The firm is preparing a U.S. comeback with a new regulated stablecoin under the GENIUS Act.
The DOJ recently announced a civil forfeiture case tied to around $2 million in crypto allegedly used to fund terrorist groups. Acknowledged for its cooperation in the operation, Tether revealed in a July 24 blog post that it froze $1.6 million linked to the wallets and reissued new USDT (USDT) to aid in asset recovery.
According to the company, it has now frozen over $2.9 billion in USDT tied to illicit activity, working with more than 275 law enforcement agencies across 59 countries. Over 5,000 wallets have been blocked to date, with more than half of those actions involving U.S. authorities.
Commenting on the enforcement actions, Tether CEO Paolo Ardoino framed the move as proof that blockchain-based assets like USDT can be more transparent and traceable than traditional finance. He said the company remains committed to supporting global investigations and protecting the crypto ecosystem from abuse.
The Gaza-linked case adds to a growing list of high-profile seizures involving Tether this year. In June, the DOJ acknowledged the firm’s help in a $225 million asset recovery. Earlier this month, Brazilian authorities also credited Tether for blocking $6.2 million in a cross-border laundering scheme.
Other recent cases include freezing $23 million tied to sanctioned Russian exchange Garantex, and $9 million from the Bybit hack.
Tether’s actions come as the firm eyes expansion in the U.S. market and seeks to strengthen its regulatory footing.
Tether plots U.S. reentry with regulated stablecoin offering
After years of operating primarily outside the U.S. following clashes with regulators, Tether is now planning a return.
CEO Ardoino confirmed that the company is preparing to expand in the U.S. under the new GENIUS Act, which was signed into law last week by President Trump.
This time, Tether will roll out a regulated, institutional-grade stablecoin tailored for payments, interbank settlements, and trading infrastructure, part of its broader push to align with compliance and rebuild trust in the market.
While no specific timeline has been given for the re-entry, Tether is reportedly already in talks with auditors and is mulling the creation of a U.S.-focused stablecoin with enhanced disclosures to meet regulatory standards.
