Tether Freezes USDT in 131 TRON Wallets As U.S. Sanctions Target ISIS-K Crypto Network

TL;DR

• Tether froze USDT held in 131 TRON wallets after OFAC linked the addresses to ISIS-K.
• The updated U.S. sanctions list added 134 crypto wallet addresses, including 131 on TRON and three on Monero.
• Chainalysis said the sanctioned TRON wallets received more than $1.4 million since 2023 and sent over $880,000.
• The latest action expands Tether’s compliance efforts as regulators tighten oversight of illicit crypto transactions.

Tether has frozen USDT balances held in all 131 TRON wallets linked to the terrorist group ISIS-K after the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) expanded its sanctions list to include 134 cryptocurrency wallet addresses. The updated designation covers 131 TRON addresses and three Monero addresses believed to be associated with the group’s financial activities.

According to blockchain analytics firm Chainalysis, the sanctioned TRON wallets have received more than $1.4 million since 2023 and have transferred over $880,000 during that period. The action follows OFAC’s latest sanctions update targeting ISIS-K, the Islamic State’s affiliate operating in Afghanistan, Pakistan, and parts of Central Asia.

OFAC Expands Sanctions as Tether Blocks ISIS-K-Linked Wallets

The latest sanctions update adds 134 cryptocurrency wallet identifiers to OFAC’s existing designation of ISIS-K, a group that has previously used cryptocurrency to support fundraising efforts. Historical investigations have shown that the organization’s media arm, al-Azaim Media Foundation, solicited crypto donations through online campaigns using multiple digital assets, including TRON, Monero, and Bitcoin.

Chainalysis points out that the 131 TRON wallets at the center of the sanctions have interacted with mainstream crypto services and, in some cases, transferred funds to cryptocurrency exchangers based in Syria. In response to the designation, Tether froze the USDT balances held in all of the sanctioned TRON addresses.

The sanctions update comes as regulators continue to strengthen oversight of cryptocurrency transactions linked to terrorism financing and other illicit activities. Following the latest designation, financial institutions and virtual asset service providers are expected to update their sanctions screening and transaction monitoring systems to identify exposure to the newly listed wallet addresses.

Tether Continues to Expand Compliance Efforts

The latest wallet freeze comes just days after Tether, currently providing custodial wallets, blocked $344 million in USDT held across two TRON wallets that had been flagged by U.S. authorities over suspected illicit activity. That action ranked among the company’s largest compliance operations and reflected its ongoing coordination with law enforcement agencies.

According to Tether, the company has frozen more than $4.4 billion in digital assets since it began working with authorities, including approximately $2.1 billion linked to requests from U.S. agencies. The stablecoin issuer says it has supported more than 2,300 investigations involving 340 agencies across 65 countries.

The latest enforcement action highlights the growing role of stablecoin issuers in enforcing sanctions on public blockchain networks. While blockchain transactions remain transparent and traceable, issuers such as Tether, which is also one of the biggest Bitcoin holders, can freeze tokens when wallet addresses are linked to sanctioned entities or criminal investigations, making compliance measures an increasingly important part of the digital asset ecosystem.

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