Tether freezes $29.62 million USDT to combat criminal activities of Cambodian Huione Group

Tether recently took action to freeze USDT tokens totaling $29.62 million, which are closely related to the suspected criminal activities of the Huione Group in Cambodia. This action demonstrates Tether’s strong determination to protect the security and credibility of its USDT stablecoin. It is worth noting that although Tether has frozen the relevant address, the illegal activities at this address have not completely stopped, and the transfer of Circle's USDC stable currency continues.

On July 13, stablecoin issuer Tether implemented a freeze on 29.62 million USDT tokens involved in the Cambodian Huione Group. This measure was taken in the context of the group’s suspected criminal activities. Tether’s move not only demonstrates its maintenance of the integrity of the stablecoin, but also reflects its proactive response strategy in the face of increasing regulatory scrutiny.

Although Tether has frozen the USDT tokens involved in the case, the illegal fund flow from the relevant address has not been completely curbed, and Circle's USDC stable currency is still being transferred under this address.

The reason why Tether freezes USDT tokens

A report by blockchain security company Bitrace revealed that USDT tokens held by the "TNVaKW" wallet associated with the Cambodian Huione Group's guarantee business were frozen. The wallet was activated on July 9, 2024, and was frozen by Tether only a week later.

Bitrace stated that the reason why the "TNVaKW" wallet was frozen may involve assisting money laundering, and these funds may be used for illegal activities such as fraud and cryptocurrency theft. Although the wallet’s USDT tokens have been frozen, the address’s illegal activity does not appear to have completely stopped, with Circle’s USDC stablecoin still being transferred.

Tether USDT frozen | Source: Bitrace

According to Bitrace, Huione Group transferred 114,800 USDC from the frozen TNVaKW address to the newly activated TQuFSv address.

However, this freezing action is limited to the specific addresses involved. Other business addresses of Huione Group are not affected and can still operate normally. Bitrace also added that Huione’s other related business addresses, such as TL8TBp, have been conducting guarantee and payment business in the past six months, and these addresses have not been frozen.

Tether’s decision to freeze follows a report that Huione Guarantee has become a favored online marketplace for scammers. Huione Guarantee is part of the Huione Group, a conglomerate linked to Cambodia's ruling Hun Sen family.

According to foreign media reports, Huione Guarantee and the crypto wallets used by its merchants have received more than $11 billion since 2021, with Tether’s USDT playing an important role in these transactions.

Tether’s freezing action is consistent with its firm stance against the illegal use of its assets. Tether has frozen large amounts of USDT over the past year, including $5.2 million linked to a phishing scam in May this year, and $225 million linked to a Southeast Asian human trafficking ring last year.

Despite these measures, Tether still faces criticism and accusations that its tokens are used for illegal activities. Recently, Ripple CEO Brad Garlinghouse hinted that the US government might launch an investigation into Tether, but Tether CEO Paolo Ardoino strongly denied this.

Conclusion:

Tether’s freezing of USDT tokens highlights its active stance in maintaining the security of digital currencies and combating illegal financial activities. Despite continued criticism and possible regulatory pressure from the outside world, Tether has demonstrated its commitment to preventing assets from being used for illegal purposes through practical actions.

This incident also reminded the entire industry that the security and compliance of stablecoins are key to the healthy development of the digital currency ecosystem. As the cryptocurrency market continues to mature, it is expected that more similar regulatory and security measures will emerge in the future to protect consumer interests and enhance overall trust in the market.

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