Tether has frozen nearly 30 times more funds than Circle since 2023, revealing a major difference in how stablecoin giants approach enforcement.
Quick Summary – TLDR:
- Tether froze $3.3 billion across 7,268 wallet addresses between 2023 and 2025, mostly on the Tron network.
- Circle froze $109 million across 372 addresses, primarily on Ethereum, and only under court or regulatory orders.
- Tether uses a freeze, burn and reissue model to recover assets quickly in coordination with law enforcement.
- Circle follows a strict legal-first approach without burning or reissuing tokens, ensuring higher legal safeguards.
What Happened?
Blockchain analytics firm AMLBot released a report revealing how the two largest stablecoin issuers, Tether and Circle, differ dramatically in how they freeze wallets linked to illegal activity. From 2023 to 2025, Tether blacklisted over 7,000 wallets, freezing about $3.3 billion, while Circle froze just $109 million across 372 addresses.
The report shines a light on the divergent philosophies the companies follow in responding to fraud, sanctions, and regulatory requests.
AMLBot reported that between 2023 and 2025, Tether and Circle froze approximately $3.3 billion and $109 million in crypto assets via their freezing mechanisms—a roughly 30x gap. The report said Tether blacklisted 7,268 addresses during the period, with over 2,800 handled in… pic.twitter.com/5ro5R81Ueg
— Wu Blockchain (@WuBlockchain) December 25, 2025
Tether’s Aggressive Asset Recovery
Tether’s enforcement model is highly proactive. According to AMLBot, more than 2,800 of Tether’s blacklist actions were done in coordination with U.S. law enforcement agencies, targeting scams, fraud, and other forms of cybercrime.
- A large portion of these freezes occurred on the Tron blockchain, accounting for over 53 percent of Tether’s total frozen funds.
- The firm also uses a “freeze, burn and reissue” mechanism, allowing it to destroy compromised tokens and reissue new ones.
- The Ethereum network still holds $1.54 billion worth of frozen Tether in blacklisted wallets.
This model allows Tether to move fast and restore stolen assets or block illicit funds before they can be moved further.
Circle’s Legal-First Philosophy
In contrast, Circle takes a more restrained, legally conservative approach. The company only acts under formal legal orders, whether through courts or regulatory directives.
- The $109 million it froze was almost entirely tied to the Ethereum network.
- Circle does not destroy or reissue frozen tokens.
- Once frozen, USDC remains locked unless legally cleared for release.
This method emphasizes legal transparency and user protections, even if it means slower enforcement or less flexibility in asset recovery.
A Tale of Two Compliance Strategies
The report from AMLBot highlights that issuer policies and enforcement strategies have a big impact on how stablecoins function in real-world compliance scenarios.
- Tether works closely with investigators, often preemptively freezing suspicious funds.
- Circle stays within narrow legal bounds, prioritizing formal legal processes over speed.
Each approach comes with trade-offs. Tether’s model has helped recover funds tied to scams and trafficking, but critics warn of centralization risks and lack of user autonomy. Circle’s model ensures clearer legal safeguards, though it may be slower to react in fast-moving fraud cases.
SQ Magazine Takeaway
Honestly, this report is a clear reminder that not all stablecoins are created equal. I think it’s fascinating to see just how different Tether and Circle are in the way they deal with bad actors. Tether’s freeze, burn, and reissue model may sound like a superhero move, but it also means they hold a lot of power over users’ assets. Meanwhile, Circle sticks to the rulebook, which is reassuring but possibly slower in emergencies. If you’re using stablecoins, knowing how these companies operate behind the scenes really matters.
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