Key Insights:
- Tether froze $1.6 million in USDT tied to terror-linked wallets used by Gaza’s BuyCash network.
- The company has now blocked over 5,000 wallets and frozen nearly $3 billion in illegal funds over the last two years.
- Tether is planning a regulated re-entry into the U.S. market under the newly signed GENIUS Act.
Tether, the world’s leading stablecoin issuer, is making headlines again. This time, it isn’t doing so for controversy.
Instead, Tether is being applauded for helping the U.S. Department of Justice freeze $1.6 million in USDT linked to terror financing through a Gaza-based network.
As the crypto space continues to struggle with how to balance growth and safety, Tether’s actions are sending a clear message.
That transparency and playing by the law are no longer optional.
A Freeze That Signals a Shift in Crypto Oversight
The U.S. Department of Justice recently announced a civil forfeiture case involving around $2 million in crypto used to fund terrorist organizations. Tether was part of this move, after reportedly freezing $1.6 million in USDT, related to the Gaza-based BuyCash network.
JUST IN: TETHER FREEZES & REISSUES $1.6M USDT LINKED TO GAZA BUYCASH ACCUSED OF TERROR FINANCING
SAYS IT HAS NOW FROZEN OVER $2.9B IN USDT TO DATE
Source: @WuBlockchain https://t.co/ZTtgfl5wdQ pic.twitter.com/Ovc5A8V4aL
— Mario Nawfal’s Roundtable (@RoundtableSpace) July 24, 2025
The move came after direct coordination with law enforcement and was confirmed by Tether in a 24 July blog post.
This wasn’t just a matter of flipping a switch. Tether also reissued new USDT tokens to help make the asset recovery process easier.
Tether’s CEO, Paolo Ardoino, even noted that blockchain assets like USDT offer a level of transparency that trad-fi simply can’t. “We’ve proven that digital assets can be traced and managed in ways that protect the ecosystem from misuse,” he said.
Tether and Law Enforcement Partnerships
This isn’t Tether’s first rodeo. Since 2023, the company has frozen over $2.9 billion in USDT connected to illegal activity. It has blocked more than 5,000 wallets, 2,800 of which were flagged in collaboration with U.S. authorities.
In total, Tether now works with 275 enforcement agencies in 59 countries.
Some interesting operations include the $225 million the company recovered in June 2025 with DOJ support, alongside the $23 million frozen from Russian exchange Garantex.
Tether also helped to freeze $9 million from the Bybit exchange hack, alongside $6.2 million from a Brazilian laundering operation involving Klever Wallet.
These actions from Tether have helped to counter the argument that crypto is the “wild west” of the financial space. Tether’s asset freezes show how traceable and responsive blockchain can be when paired with enforcement.
A U.S. Comeback Under the GENIUS Act
Tether is preparing a major return to the US markets after years of operating outside the country’s borders. This time, the company is playing by the rules.
The catalyst for this move is the GENIUS Act, which was signed into law last week by President Trump.
JUST IN: TETHER MAKES A MOVE ON THE U.S. MARKET
Tether plans to bring USDT to the U.S. under the GENIUS Act and launch a new U.S.-based stablecoin.
Billions in fresh liquidity could soon flow into #Bitcoin — this could be a major catalyst.
— Coin Bureau (@coinbureau) July 19, 2025
Tether plans to bring USDT to the U.S. under the GENIUS Act and launch a new U.S.-based stablecoin. 
Tether is planning to launch a new institutional-grade stablecoin, which is designed specifically for use in payments, interbank settlements, and trading. It is also in discussions with auditors and regulators to meet requirements that will define the next generation of crypto finance.
So far, while no launch date has been set, insiders say development is well underway.
Tether Sets New Compliance Standard for the Crypto Industry
Tether’s role in freezing $1.6 million linked to a terror financing network shows just how far the crypto industry has come. What was once seen as an unregulated Wild West is now showing accountability and alignment with the law.
As Tether prepares to re-enter the U.S. market under new rules, it’s setting the tone for other stablecoin issuers, and compliance is no longer being seen as an afterthought.
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