Tether Helps DOJ Freeze $52M in Xinbi-Linked Crypto Assets
The US Department of Justice (DOJ) has frozen over $52 million in cryptocurrency tied to Xinbi Guarantee, an illicit online marketplace on Telegram. Tether, a private stablecoin issuer, helped facilitate this action by freezing tokens at the smart contract level.
Xinbi was identified as the second-largest illicit online marketplace ever detected, with over $24 billion in transactions processed since 2022. The majority of these payments ran through Tether's USDT on the Tron blockchain.
The freeze is a result of cooperation between the DOJ and Elliptic, a blockchain analytics firm that worked with the U.S. Secret Service to track down wallets tied to Xinbi. Tether has claimed to have helped freeze over $5 billion in assets tied to illegal activity through its compliance work with law enforcement agencies worldwide.
The incident highlights the power of stablecoin issuers like Tether and raises questions about the trade-offs involved in having a central switch that can be used to freeze assets. As the crypto industry evolves, it will be interesting to see how this power is wielded and whether it has unintended consequences on users and the market as a whole.