Tether freezes $1.5 billion in 30 minutes after Binance hack, but $729 million escapes
Tether describes immobilized USDT, while US precedents show separate decisions governing custody, ownership and return. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Tether froze more than $1.5 billion in stolen USDT within 30 minutes of Binance's Oct. 29 hack, highlighting stablecoins' ability to disrupt cryptocurrency theft.
In a Nov. 2 statement, the world's largest stablecoin issuer said its intervention prevented the immobilized funds from being transferred or laundered by attackers linked to North Korea.
The announcement followed an Oct. 31 FBI alert attributing the theft of more than $6 billion from Binance to North Korea's TraderTraitor hacking operation, which US authorities have linked to efforts to finance the country's weapons programs.
Tether CEO Paolo Ardoino said the incident demonstrated why USDT was an unattractive vehicle for criminals, arguing that the company's ability to rapidly block suspicious addresses made it difficult for attackers to retain access to stolen assets.
The intervention also prompted a broader debate about stablecoins' effectiveness in combating financial crime.
Rayne Steinberg, co-founder of digital asset investment firm Arca, contrasted Tether's response with traditional banks' histories of processing illicit transactions, arguing that financial institutions have often identified money laundering only after funds had already moved through their systems.
Steinberg pointed to major banking scandals involving sanctions evasion and criminal proceeds, questioning the criticism frequently directed at stablecoins over their potential use in illicit finance.
He said:
“Turns out a ledger you can actually see beats a duffel bag you can't.”
Tether cited its broader enforcement record to support that argument. The company said it has frozen more than $7 billion in USDT across secondary-market addresses, including the latest Binance intervention, and helped return approximately $1.2 billion to rightful owners and law enforcement through token reissuance.
It also reported working with more than 360 law enforcement agencies across 73 countries to investigate financial crime and restrict suspicious transactions.
Despite the rapid intervention, blockchain investigators found that attackers managed to move substantial amounts of stolen USDT before Tether could restrict their wallets.