Tether Freezes USDT Holdings Linked to ISIS-K
Tether has taken action to freeze USDT holdings in 131 TRON wallets associated with ISIS-K, the Afghanistan and Pakistan affiliate of the Islamic State. This decision follows updated sanctions by the U.S. Treasury’s Office of Foreign Assets Control (OFAC), which designated over 100 cryptocurrency identifiers related to the group, adding a total of 134 crypto wallet identifiers, comprising 131 on TRON and three on Monero.
Details of the Sanctions
Chainalysis reported that the measures against ISIS-K were officially updated on July 1. Since the beginning of 2023, the targeted TRON wallets have received transactions exceeding $1.4 million and have sent out more than $880,000. Notably, these wallets have interacted with various mainstream financial services and routed funds to crypto exchanges based in Syria.
The OFAC previously acknowledged ISIS-K as a terrorist organization, and the latest freeze marks a significant enforcement action against its financing efforts.
Chainalysis emphasized that ISIS-K’s media entity, al-Azaim Media Foundation, actively solicits cryptocurrency donations through various online platforms. The firm also mentioned that previous funding efforts often involved multiple smaller transactions rather than fewer larger ones.
Tether’s Crackdown on Illicit Activities
The action by Tether aligns with an intensified crackdown on illicit activities involving USDT. Following the establishment of its Financial Crime Unit, which launched in 2024, Tether has reportedly frozen roughly $450 million in suspected illicit assets. Earlier this year, Tether froze over $514 million across 370 addresses within a single month, mostly linked to TRON, and has placed restrictions on more than 4,163 addresses, totaling about $1.26 billion in frozen funds across Ethereum and TRON.
Impact on Financial Institutions
Additionally, the OFAC measures have triggered requirements for virtual asset service providers and financial institutions to revise their sanctions screening protocols and transaction audits. Chainalysis has updated its products to help compliance teams track the newly listed ISIS-K wallet addresses and their related networks.
