From 2023 to 2025, Tether and Circle froze $3.3 billion and $109 million in cryptocurrencies, respectively. This showed clear differences in how the two major issuers of dollar-pegged stablecoins manage illegal transactions and financial risks.
An analysis by blockchain forensics firm AMLBot examined stablecoin freezing activity in Ethereum (ERC-20) and Tron (TRC-20). In this, not only the blocked funds were evaluated, but also the intervention model of each company.
Tether, which is responsible for USDT, leads the way in terms of amount of frozen assets. The company’s blacklist included 7,268 addresses, more than 2,800 of which were coordinated with U.S. government agencies. The company accumulated a total of $3.29 billion.
According to AMLBot, Tether’s mechanism allows tokens to be frozen and reissued, “returning millions of dollars to fraud victims” and helping seize funds related to terrorism, human trafficking, and fraud schemes. From 2024 to 2025, Tether “burned” up to 30 million USDT to protect stolen assets and reissue clean replacements to affected users.
In contrast, Circle took a more conservative approach. USDC stablecoins can only be frozen by court order, sanctions, or regulatory orders. During the same period, Circle blocked 372 addresses and $109 million worth of Ethereum.
Unlike tethers, Circle does not reissue or destroy tokens. The address will remain blocked until the restriction is lifted. Additionally, the company publicly reports all blacklisted addresses to increase transparency and regulatory compliance.
AMLBot CEO Slava Demchuk explained that increasing the amount of USDT locked does not necessarily improve compliance. Tether’s higher numbers reflect that USDT is used in riskier transactions, particularly Tron, and that the company applies a proactive intervention model that leaves a visible trace on the network.
In the case of USDC, the decline in activity reflects lower exposure to illicit flows and a stricter freezing model based on judicial requirements.
more 53% of USDT locked with Tether is compatible with the Tron network, The total supply of USDT, a popular blockchain for stablecoin applications, will exceed $191 billion in 2025, and its user base reached 500 million in October.
Circle has approximately $78 billion worth of USDC in circulation.
Legal risks and disputes
The report also highlights the legal risks associated with Tether’s aggressive approach. Intervention without a court order may give rise to legal disputes.
In April 2025, Riverstone Consultancy sued Tether for failing to comply with legal procedures following a block of approximately $45 million requested by Bulgarian police. Tether has worked with more than 275 blockchain intelligence agencies and companies in 59 jurisdictions and applied a rapid response model to process up to $2.7 billion in stolen funds.
According to each company, Freezing stablecoins has become an essential tool to stop illegal circulation. However, experts such as Dmytro Tarasiuk, Product Director at Core3, warn that these practices are indicative of the centralization of actors within the ecosystem.
For Tarasiuk, these blocks reflect the institutionalization of the market, with USDT and USDC becoming the primary gateways for institutional investment, global adoption, and government interaction.
Finally, the growth of freezes and blacklists has led to debates about the erosion of decentralization and privacy, fundamental principles of the ecosystem.
As U.S. and European Union regulators seek to increase oversight, stablecoin issuers must balance transparency, compliance, and user protection while maintaining investor confidence and market integrity.
