Tether recently froze $29.62 million in USDT connected to criminal activities involving Cambodia's Huione Group, showing its dedication to keeping its stablecoin secure amid growing regulatory pressures. However, the affected address continued to move Circle's USDC stablecoin, raising doubts about the effectiveness of the freeze.

Blockchain security firm Bitrace revealed that the wallet “TNVaKW,” which held the frozen USDT tokens, was tied to Huione Group’s guarantee business in Cambodia. The wallet was frozen only a week after being activated on July 9, 2024. Bitrace indicated that the freeze likely aimed to stop the laundering of funds from fraud and crypto theft. Despite the freeze, the address managed to transfer 114,800 USDC to a newly activated address, TQuFSv.

Bitrace also pointed out that the freeze targeted only this specific address, leaving Huione’s other business addresses operational. The old business address TL8TBp is still in use, along with other guarantee and payment operations from the past six months.

This action follows reports that Huione Guarantee has become a favored platform for scam operators. Part of the Cambodian conglomerate Huione Group, linked to the ruling Hun family, Huione Guarantee has facilitated over $11 billion in transactions since 2021, with Tether’s USDT playing a key role. While not all transactions are illicit, many are believed to be tied to fraudulent activities. Thus, Tether's freezing action aligns with its strict stance against the illegal use of its assets.

In the past year, Tether has frozen large amounts of USDT, including $5.2 million linked to phishing scams in May and $225 million connected to a Southeast Asian human trafficking ring last year. Despite these efforts, Tether faces criticism and accusations that its tokens fund criminal activities. Ripple CEO Brad Garlinghouse recently hinted at a possible US government investigation into Tether, a claim strongly denied by Tether CEO Paolo Ardoino.

Tether's decision to freeze these USDT tokens is part of a broader strategy to combat illegal activities in the cryptocurrency world. The freezing of USDT linked to the Huione Group highlights Tether's efforts to protect its stablecoin’s integrity. However, the continued movement of USDC by the implicated address shows the challenges in completely stopping illicit activities.

Tether’s history of taking action against misuse of its assets includes freezing $5.2 million in May tied to phishing scams and $225 million last year connected to human trafficking. These actions illustrate Tether's commitment to protecting its stablecoin and users.

Despite ongoing criticism and allegations, Tether remains committed to transparency and regulatory compliance. The recent freezing of USDT linked to Huione Group underscores this commitment, even as challenges persist in curbing illicit activities in the crypto space.