Tether, TRON and TRM Labs joint unit freezes $450 million in crypto linked to criminal activity

A joint collaboration between Tether, TRON and blockchain analytics firm TRM Labs called the T3 Financial Crime Unit has announced on Wednesday that it has frozen more than $450 million in USDT suspected to be acquired through illicit, criminal means since the initiative launched in September 2024.

The frozen funds by the crime unit involve investigations into various illicit operations including money laundering, crypto exchange hacks, North Korea-linked cyber operations, terrorist cells financing, drug trafficking, and violent crimes including kidnappings and extortion, according to a statement published by Tether.

The T3 FCU has enlisted the help of multiple law enforcement agencies in its fight against illicit activity in the crypto community. These agencies span five different continents, with countries like the U.S., Spain, Germany, the Netherlands and Bulgaria having the highest volume of assets frozen.

Tether’s T3 puts in the work

The T3 FCU reported that it helped in the recovery of 43.9% more illicit proceeds in 2025 compared to the previous year. The unit claimed it can execute asset freezes within 24 hours of a request by law enforcement regarding an investigation, a pace that traditional banks and services find hard to match.

The group pointed to several high-profile cases where it helped with asset freezing and recovery. One involved the freezing of about $26.4 million allegedly connected to a European money-laundering ring that was dismantled alongside Spain’s Guardia Civil in early 2025.

Another case was “Operation Lusocoin”, a Brazilian Federal Police investigation that froze more than 3 billion Brazilian reais in crypto assets, of which 4.3 million USDT linked to a criminal network was a part, according to Tether’s statement. Additional freezes targeted wallets tied to North Korean cyber activity and funds traced to the Bybit hack, with nearly $9 million in crypto funds identified.

In addition, Tether confirmed a $344 million USDT freeze on TRON in April 2026 following intelligence-sharing with U.S. and international law enforcement.

T3 FCU breaks higher ground amid international recognition

The Financial Action Task Force cited T3 FCU earlier this year as an “invaluable resource for law enforcement agencies worldwide.” The FATF highlighted the unit alongside TRM Labs’ Beacon Network as leading examples of public-private partnerships for combating criminal activity in the crypto community.

The recognition comes amid a sharp rise in illicit cryptocurrency activity, with blockchain-related criminal activity reaching a record $158 billion in 2025, according to estimates from TRM Labs. The figures underscore the growing pressure on stablecoin issuers and blockchain platforms to strengthen compliance frameworks as regulators intensify the crypto sector’s scrutiny.

“Compliance is not an option; it is a part of our commitment to protect our users and stop any illicit behaviors,” said Paolo Ardoino in the announcement. “This $450 million milestone is just the beginning of what T3 is capable of,” he added.

Chris Janczewski, who previously served as a special agent with the IRS Criminal Investigation division, said the initiative combines “real-time intelligence and expertise with coordinated public-private action to disrupt illicit activity as it happens.”

The comments reflect an intensified industry effort to ensure stronger oversight and enforcement capabilities.

Is crypto decentralization a myth?

The scale of the recent asset freezes has reignited debate over the level of control centralized stablecoin issuers retain within blockchain ecosystems that are often said to be ‘decentralized’.

Tether includes issuer-level controls that allow Tether to blacklist specific wallet addresses and freeze associated funds, which goes against the intent behind cryptocurrencies like Bitcoin.

According to onchain data compiled by BlockSec, more than $500 million worth of USDT was frozen over a recent 30-day period. This amount extends beyond the activity linked to the T3 Financial Crime Unit in the statement and proves Tether is doing even more blacklisting on multiple blockchains.