Tether Freezes $45M In USDT, Exposing Sophisticated ‘Pig Butchering’ Crypto Fraud Networks
In Brief
Tether froze over $45 million in USDT across 15 Ethereum addresses linked to large-scale “pig butchering” crypto fraud, highlighting ongoing need for coordinated action between exchanges, blockchain analytics, and law enforcement.
On October 31st, 2025, USDT stablecoin issuer Tether carried out one of its most massive address-freezing operations of the year, immobilizing more than $45 million in USDT across 15 Ethereum addresses linked to large-scale fraud. This marks roughly double the volume of Tether’s previous major freeze, which targeted addresses associated with the sanctioned exchange Garantex, highlighting both the scale and persistence of illicit activity in the cryptocurrency sector.
The single largest frozen wallet, held 26.1 million USDT, representing a substantial portion of the total blocked funds. Research conducted by the cryptocurrency AML and KYT provider BitOK indicates that these addresses were credited with illicit funds originating from centralized exchanges. Because exchanges typically disclose client and transaction data only in response to law enforcement requests, it is reasonable to infer that this freezing operation was executed in coordination with authorities and exchange platforms.
BitOK’s analysis also identified a classic laundering pattern employed by the perpetrators, known as “accumulate, layer, integrate,” one of the most common methodologies observed in cryptocurrency markets today. The process began with accumulation wallets, which served as consolidation points for funds collected from multiple victims and accomplices. From these wallets, the assets were transferred to intermediate “transit” addresses to obscure the trail further, a typical layering tactic.
In order to complicate the identification of ultimate beneficial owners, portions of the funds were moved through secondary and tertiary addresses, often in circular patterns. Assets would move from originating addresses to second-level wallets, then to third-level wallets, before returning to the second-level addresses. This introduces on-chain “noise,” making blockchain analytics more difficult and reflecting a sophisticated approach to hiding illicit proceeds.
The final phase involved sending USDT to deposit addresses controlled by major centralized exchanges, including Binance, Kraken, HTX, KuCoin, OKX, and WhiteBIT, where the funds could be cashed out, converted, or redistributed. The company’s on-chain analysis successfully traced portions of the stolen funds to several of these platforms, revealing a recurring pattern of “accumulation → transit → exchange” that aligns closely with previously documented typologies of organized cryptocurrency fraud.
Overall, the operation illustrates both the sophistication of contemporary laundering schemes in cryptocurrency and the growing importance of coordinated action between blockchain analytics, exchanges, and law enforcement to protect the ecosystem and deter criminal activity.
Tether Highlights Rising ‘Pig Butchering’ Crypto Frauds And The Need For Enhanced Industry-Law Enforcement Collaboration
The underlying predicate offense appears to align with a pseudo-investment fraud commonly associated with so-called “pig butchering” romance and investment scams. In these schemes, perpetrators typically use social engineering and misrepresentation, presenting themselves as professional traders or portfolio managers to convince victims to transfer substantial amounts of cryptocurrency for purported high-yield trading strategies.
Over time, victims are often shown fabricated performance data through fake trading dashboards, screenshots, or staged videos designed to simulate profitable trades and growing account balances. Ultimately, the fraudsters either disappear with the funds in an exit scam or claim that the victim’s assets are “frozen” or “under review,” demanding additional payments for “unlocking,” taxes, or security deposits, which are sent to addresses controlled by the scammers. Experts in blockchain security note a marked increase in reports of this type of fraud, identifying it as a compliance risk for financial institutions and virtual asset service providers.
While the recent freezing of approximately $45 million in USDT represents a notable enforcement milestone, it constitutes only a small portion of the overall volume linked to fraudulent activity in the virtual asset ecosystem. In a related investigation conducted by analysts, roughly $150 million in illicit proceeds was identified, with $83 million traced through the associated wallet cluster and only $24 million successfully frozen. This discrepancy illustrates the broader reality that the total amount of misappropriated funds is considerably higher, with a substantial share remaining beyond the reach of timely intervention.
Effectively addressing these threats requires close collaboration among industry participants, blockchain analytics providers, and law enforcement agencies. Since USDT’s launch in 2014, Tether has frozen over $1.5 billion in assets connected to suspected illicit activity. Despite these measures, the frequency and sophistication of cryptocurrency-related fraud continue to rise. A notable case occurred in November 2023, when Tether voluntarily froze around $225 million in USDT tied to a large-scale international romance investment-phishing operation using the “pig butchering” tactic in Southeast Asia.
The October 31st enforcement action targeted a substantial scam network, disrupting fraudulent fund flows and limiting the perpetrators’ liquidity. Nevertheless, the fight against such schemes is ongoing. The industry is increasingly focused on early identification, tracing, and disruption of fraudulent activity, strengthening preventive and detection controls, and expanding operational cooperation with law enforcement to more effectively combat financial crime enabled by cryptocurrencies.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in crypto, AI, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
