Spanish authorities have frozen $26.4 million in cryptocurrencies linked to a major money laundering scheme in Europe. This action involved collaboration with blockchain companies like Tether, Tron, and TRM Labs.
The investigation was part of a broader effort to tackle illegal financial activities. It was conducted with the T3 Financial Crime Unit, an initiative launched in August 2024. Police surveillance helped identify the criminal organization, and their crypto wallets were traced back to illicit activities. The T3 Unit used Know Your Customer (KYC) data from service providers, making this freeze the largest coordinated effort to date. This adds to the $126 million already frozen in its first year.
A spokesperson from the Spanish law enforcement agency, Guardia Civil, stated, “This organization moved millions across borders, using both cash and crypto to help criminal groups launder their profits.”
Tron has reportedly cut down illicit volumes on its blockchain by $6 billion. According to TRM Labs, 49% of illegal activities on Tron are linked to sanctioned entities, while 32% are associated with blocked funds. Despite these efforts, Tron remains the top blockchain for illegal transactions, accounting for 58% of such activities. Tether's USDT is the most commonly used asset for these criminal activities.
Using centralized stablecoins like USDT and Circle’s USD Coin to freeze funds tied to crime is a common practice. These stablecoin issuers have built-in mechanisms to block transactions related to illegal activities.
Tether CEO Paolo Ardoino emphasized, “Let this serve as a clear warning—criminals who attempt to misuse Tether will get caught.”
In November 2023, Tether froze $225 million in USDT linked to pig butchering scams. These scams involve coercion and manipulation to defraud victims, following an investigation by the U.S. Department of Justice.
Southeast Asia has become a hotspot for these scams, often run by organized crime groups. Victims can include individuals who are kidnapped and forced into scam operations at resorts.
Pig butchering syndicates are known to launder their proceeds through a dark web marketplace called Huione Guarantee, which previously relied heavily on Tether. To avoid having their funds frozen, the platform launched its own stablecoin in September, as reported by security firm Elliptic.