Tether has frozen all USDT held in 131 TRON wallets linked to ISIS-K after the U.S. Treasury added the addresses to its OFAC sanctions list, in one of the most direct deployments yet of a stablecoin issuer’s control mechanisms against accused terrorist financiers.
Since 2023, those TRON wallets transferred over $880,000 and received more than $1.4 million in cryptocurrency, blockchain analytics firm Chainalysis said.
This week, the Office of Foreign Assets Control of the Treasury Department revised its identification of ISIL Khorasan, the Afghanistan and Pakistan branch of the Islamic State network, more popularly known as ISIS-K. The update identified 134 crypto wallet IDs belonging to the organization, comprising 131 TRON addresses and three Monero wallet IDs. Consequently, U.S. citizens and many regulated entities globally are now prohibited from engaging with such wallets and must freeze any assets they hold.
The TRON addresses have been active since 2023, according to Chainalysis, which reviewed the newly sanctioned wallets. The firm said it received more than $1.4 million in crypto and sent out over $880,000 during that time, showing how sanctioned organizations can utilize stablecoins and low‑cost networks to move funds. The addition of three Monero wallets by OFAC also demonstrates that privacy-oriented assets remain on regulators’ radars, even if they are difficult to trace.
Tether’s Freeze and Growing Compliance Push
Following OFAC’s update, Chainalysis confirmed that “Tether has frozen the balances on all 131 TRON addresses,” making the USDT in those wallets unusable on compliant platforms. Tether does this by blacklisting specific addresses at the token contract level, so stablecoin transfers stop even though the wallets remain visible on‑chain.
This move fits into a broader pattern of Tether using its controls more often in crime and sanctions cases. Chainalysis noted that Tether’s T3 Financial Crime Unit, launched in 2024 with TRON and TRM Labs, has helped freeze hundreds of millions of dollars in suspected illicit funds, much of it on TRON.
The company has also blocked thousands of Ethereum and TRON addresses, locking over a billion dollars in assets as regulators and courts push for tighter oversight of stablecoin.
Chainalysis said virtual asset service providers must quickly update sanctions screening and transaction monitoring to cover the newly listed TRON and Monero addresses or risk touching funds tied to an OFAC‑designated terrorist group.
READ MORE: DYDX Coin Price Crashes 20% After Arcus Debut: What’s Next?
