Tether's Fast Freeze Fails to Catch Illicit USDT

The world's largest stablecoin, USDT, is vulnerable to illicit transactions due to its complex freeze process. According to research from BitOK, a blockchain analytics firm, Tether takes an average of just over one hour and forty-six minutes to freeze blacklisted addresses on Ethereum, down from three hours ten minutes in the previous year.

In some cases, this rapid response has allowed criminals to move millions of dollars before the freeze is executed. For example, in June 2025, a Tron wallet held $37.3 million in USDT when Tether began blacklisting it. The entire balance was moved just two minutes before the final approval.

BitOK found that there were 107 'clean interceptions' in the past year, with $127.6 million leaving targeted addresses between submission and execution. This is a sixfold increase from the previous year, and highlights the ongoing cat-and-mouse game between Tether and illicit actors.