Tether Freezes Over 130 Tron Wallets Tied to Terror Group

The U.S. Treasury’s Office of Foreign Assets Control (OFAC) updated its designation of ISIS-K on July 1 to add 134 cryptocurrency wallet addresses to its Specially Designated Nationals list, and stablecoin issuer Tether froze the balances on all 131 Tron addresses in the batch. The remaining three sit on Monero, where no one can touch them.

The action is a working model of how sanctions now reach onchain. The government publishes a set of addresses tied to a designated group, and a centralized issuer can render the funds on those addresses unspendable almost as fast as the list goes out. That leverage exists only where an issuer controls the asset. Monero, a privacy coin with no central operator, has no equivalent kill switch, so the three designated XMR wallets keep functioning despite the sanctions.

ISIS-K, the Islamic State’s Afghan and Pakistani affiliate, is a U.S.-designated terrorist group. According to blockchain analysis firm Chainalysis, the group solicited donations through its media arm, the al-Azaim Media Foundation, over websites and messaging apps. The 131 Tron addresses took in more than 1.4 million dollars since 2023 and sent out more than 880,000 dollars, with several of the wallets routing funds to Syria-based crypto exchangers.

Tether has become a recurring instrument in these actions. In January, the company froze roughly 182 million dollars in USDT across five Tron wallets, and it has repeatedly blacklisted addresses flagged by U.S. agencies. On June 22, OFAC also took action against people responsible for moving money for ISIS, sanctioning six entities and three individuals across Europe, the Middle East, and West Africa.

The same July 1 tranche carried a separate counter-narcotics action, naming a network tied to Brazil’s Primeiro Comando da Capital that allegedly used crypto to move more than 30 million dollars in illicit proceeds. Together the designations show OFAC leaning harder on onchain identifiers, and the split outcome on Tron versus Monero marks the boundary of what that approach can actually enforce.

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