Tether has blacklisted a crypto wallet and frozen $72 million in USDT in a bid to bust a massive money laundering incident which caused manipulation in Monero’s token price. Tether’s intervention came after a suspicious $120 million transaction trail triggered a 46 percent price spike for the Monero (XMR) token, which is a popular privacy-focussed asset holding a market cap of over $6.9 billion as of Friday.
On Thursday, an unknown entity recieved 120.2 million USDT tokens on a single Tron network address. The recipient then divided the funds to route over $17.5 million into KuCoin exchange and over $8 million into swap services and other cross-chain bridges.
Blockchain sleuth ZachXBT caught wind of the operations and started tracking the footprint of the token movements. Tether soon blocked the Tron-based wallet address linked to the suspicious activity — which at the time held a total of 72,030,295 USDT accounting for over $72 million.
A Telegram channel that tracks transactions frozen by Tether logged an update on the situation.
Source: Telegram/ USDT/USDC Ban List
Soon after the details went live on Telegram, ZachXBT also published the investigation on his own Telegram channel.
“The entity created Monero orders which caused the XMR price to spike from $330 -> $420,” the on-chain investigator noted, highlighting the manipulation in XMR prices. This essentially means that the entity aggressively place big “market buy” orders for Monero, which cleared out all available sellers and pumped the price.
Source: Telegram/ Investigations by ZachXBT
Tether used its built-in smart contract controls to permanently blacklist the target address. The USDT-issuer essentially halted the apparent money laundering mid-transit as it retains the authority to freeze balances at the contract level on the Tron and Ethereum networks.
Once frozen, these tokens can neither be moved nor redeemed.
Following the incident, the price of the XMR token registered a spike. At press time, the asset was trading at $353.55 with a surge of over 11.6 percent. Earlier in the day, the token hit an even higher price of $435.61 owing to the manipulation triggered by the incident.
Tether has been working with Tron and TRM Labs for over two years now to identify and freeze tokens appearing to be moving atypically. Collectively, they form the T3 Financial Crime Unit.
Last month, Tether had disclosed that the T3 unit has managed to freeze over $450 million in illegal crypto since its debut in September 2024.
