Tether has frozen USDT balances in 131 TRON wallets linked to ISIS-K after US sanctions officials added more than 100 crypto identifiers tied to the group.
Summary
- Tether has frozen USDT balances in 131 TRON wallets linked to ISIS-K after OFAC updated its sanctions identifiers.
- Chainalysis said that TRON funds have received more than $1.4 million and sent more than $880,000 since 2023.
- The action adds pressure on VASPs to review sanctions checks on newly listed crypto addresses.
The move puts regulators of stablecoin issuers at the center of a new terror financing crackdown involving TRON and Monero addresses.
Chainalysis said the US Treasury’s Office of Foreign Assets Control updated its ISIS-K designation on July 1. The update added 134 crypto wallet identifiers, including 131 TRON addresses and three Monero addresses.
“Tether has set a balance on all 131 TRON addresses,” Chainalysis said.
OFAC’s official update shows the funds under ISIL Khorasan, also known as ISIS-K. This group is a branch of the Islamic State in Afghanistan and Pakistan. OFAC had already designated ISIS-K as a terrorist group before adding new crypto wallet identifiers.
Chainalysis tracks Tether flows to TRON wallets
Chainalysis said that 131 TRON addresses have earned more than $1.4 million since 2023. The same funds sent over $880,000 during that time. The blockchain analytics firm said several of the listed wallets were exposed to mainstream services and sent money to Syrian crypto exchangers.
The report said ISIS-K’s media arm, al-Azaim Media Foundation, used websites and messaging platforms to receive crypto donations. Chainalysis said it collected past donation addresses for TRON, Monero, and Bitcoin. The company also noted that previous terrorist financing campaigns often used small donations, rather than a few large cash transfers.
The role of stablecoins continues to grow
The latest suspension follows a broad increase in the use of USDT issuance rates. As previously reported, Tether’s T3 Financial Crime Unit has passed $450 million in frozen suspected illegal assets since its launch in 2024. The unit is supported by Tether, TRON, and TRM Labs, and focuses on USDT activity on the TRN network.
In addition, Tether set up more than $514 million across 370 addresses in a single 30-day period earlier this year. Most of the frozen funds were in TRON. BlockSec data cited in that report showed that Tether will list 4,163 addresses by 2025, surpassing $1.26 billion across Ethereum and TRON.
The pressure of sanctions extends to compliant groups
The ISIS-K move comes after another terror-linked fund was frozen this year. Victims with US terrorism convictions have asked a New York court to order Tether to turn over 344,149,759 USDT held in two OFAC-blocked TRON wallets linked to Iran’s IRGC. That case centers on whether frozen stablecoins can be transferred to creditors.
Chainalysis said the July 1 actions require virtual asset service providers and financial institutions to review sanctions testing and transaction monitoring. The company also said it has written proper addresses on its products. The initiative gives compliance teams a way to gain exposure to newly listed ISIS-K wallets and related networks.
