Tether Freezes $131M in USDT Linked to Iran Sanctions by OFAC
OFAC listed four Iran-linked wallets, and Tether used its kill switch to freeze $131 million in USDT within hours.
The U.S. Treasury's Office of Foreign Assets Control (OFAC) has added four cryptocurrency wallets believed to be associated with Iran to its sanctions list. Shortly after, Tether, the issuer of the USDT stablecoin, activated its kill switch to freeze approximately $131 million in USDT held in those wallets.
How the Kill Switch Works
Tether's kill switch is a central mechanism embedded in its smart contract that allows the company to freeze or seize tokens in specific addresses. When OFAC updates its Specially Designated Nationals (SDN) list, Tether can quickly identify matching addresses on the blockchain and freeze the funds, preventing further movement or liquidation.
- OFAC listed four wallets as linked to Iran's illicit activities.
- Tether froze $131 million in USDT within hours of the listing.
- The freeze prevents the sanctioned entities from accessing or transferring the funds.
This action is part of a broader trend of stablecoin issuers cooperating with U.S. sanctions enforcement. Tether has previously frozen funds tied to hacks, scams, and illegal activities, often in coordination with law enforcement.