Seizure of Frozen USDT for Forfeiture
Can a federal law enforcement agency in the United States seize frozen USDT for a civil asset forfeiture proceeding? Yes, USDT can be frozen and seized when law enforcement works with with the stablecoin issuer, Tether.
First, the law enforcement in the United States might gather evidence that the USDT is being used for or the proceeds of illicit activity, such as fraud, money laundering, or drug trafficking. Law enforcmenet will use blockchain analytics tools to trace the flow of cryptocurrency, including USDT, to identify the addresses and transactions associated with the crime. Using blockchain tracing, the law enforcement agency hopes to build enough evidence to show a nexus between the USDT being targeted and the illegal activity.
Second, the federal agency might apply for a seizure warrant in connection with a civil forfeiture case. The seizure warant might force Tether to send the USDT to a wallet controlled by the U.S. government. Unlike decentralized cryptocurrencies like Bitcoin, which are more difficult to seize without a private key, USDT is a centrally controlled stablecoin, making the seizure possible.
Because USDT is centrally controlled, Tether, the company that issues it, has the ability to “freeze” or “blacklist” addresses. Once the agency has a court order, they work directly with Tether. Tether, will cooperate with law enforcement by freezing the USDT in the specified addresses to prevent funds from being moved or sold.
Attorney for the Seizure of Frozen USDT for Forfeiture
The attorneys at Sammis Law Firm are experienced in fighting civil asset forfeiture actions involving crytocurrency. More of these cases are involving actions by Tether to freeze or burn USDT.
Our attorneys understand the the process for the seizure of frozen USDT that combines federal law enforcement’s investigative capabilities with the centralized control and cooperation of the stablecoin issuer, Tether. We also understand how to contest the forfeiture of the frozen assets in civil asset forfeiture proceedings.
Call 813-250-0500.
How is the Seized USDT Sent to the Government?
The seizure itself is a technical process. First, Tether might “burn” or permanently destroy the frozen USDT tokens in the blacklisted address. Tether then “reissues” an equivalent amount of new USDT to a government-controlled wallet. This allows the seizure to occur without the government needing to access the original wallet’s private keys. Second, the court order may direct Tether to transfer the frozen funds to a government-controlled wallet.
Once the USDT is in a government-controlled wallet, a civil asset forfeiture proceeding is triggered. The seizure might also be connected to a criminal asset forfeiture if an arrest warrant is also issued, although civil asset forfeiture is more common.
For civil asset forfeiture, an Assistant United States Attorney (AUSA) will file a complaint for forfeiture in the appropriate U.S. District Court. The government must prove that the assets were involved in criminal activity.
During the forfeiture process, the owner of the USDT or the owner of the wallet from which it was found can file a verified claim for court action. Filing the claim triggers a 90 day deadline for the AUSA to file the complaint for forfeiture.
When the U.S. Government Freezes Your Tether Address
What happens when DEA freezes USDT in cooperation with Tether? In those cases, Tether might ask the USDT holder to contact the DEA after providing the DEA email associated with that investigation. DEA has so many of these cases, they often return a form response that provides:
Good Afternoon,
The United States government has frozen your listed Tether address. If you have a legal interest in this account, please provide your contact information as your ID did not come through on your email. If you are represented by legal counsel, please provide their contact information as well. If you believe your assets were frozen or seized in error, you may provide the DEA with the following information. This information will be used to confirm your identity and evaluate your claim. Providing this information is voluntarily and does not guarantee your funds will be returned:
- Your full name/contact information (address/phone number/email/tether address)
- A selfie-style photograph;
- An image of your passport or other identity documents;
- Information about the transaction(s) at issue, including information about the counterparty;
- Screenshot(s) showing that you have access to the frozen address(es); and
- Any other relevant information about the transaction(s) that you would like to share.
If you would like to receive notice regarding forthcoming forfeiture actions in the United States regarding these funds, please respond to this email with your contact information and/or the contact information for your attorney. That should include your full name and the physical address where notice should be sent. If you’d prefer to receive notice via email, please indicate that in your response and specify the email address to which notice should be sent.
Regards,
Drug Enforcement Administration
Cyber Support Section
Your attorney can reach out to DEA or another federal agency on your behalf, find out what triggered the freeze and provide information showing that you are an innocent owner who purchased the USDT without knowing it was connected to any illegal activity.
Read more about how Tether seizes USDT for forfeiture proceedings by the U.S. Government.
This article was last updated on Tuesday, September 16, 2025.
