A new report by blockchain analytics firm AMLBot has revealed major differences in how the two largest stablecoin issuers, Tether and Circle, handle the freezing of crypto assets linked to illegal activity.
According to the report, between 2023 and 2025, Tether froze around $3.3 billion worth of USDT, while Circle froze about $109 million in USDC. This means Tether froze nearly 30 times more funds than Circle over the same period.
The report shows that Tether blacklisted 7,268 wallet addresses across multiple blockchains, including Ethereum and Tron. More than 2,800 of these freezes were coordinated with U.S. law enforcement agencies. A large portion of the frozen funds—over 53% of total USDT freezes—was found on the Tron network, which is commonly used for fast and low-cost stablecoin transfers.
One big difference highlighted in the report is Tether’s ability to burn and reissue tokens. In some cases, frozen USDT linked to scams or criminal activity was permanently destroyed, and new tokens were issued to return funds to victims or authorities. AMLBot reported that this process has been used in several large enforcement cases over the past two years.
Circle, which issues the USDC stablecoin, follows a more cautious and legally driven approach. During the same period, Circle blacklisted 372 addresses holding a total of $109 million. Circle only freezes funds when required by court orders, regulatory rules, or sanctions, and it does not burn or reissue tokens. Once frozen, USDC remains locked until legal approval is given to release it.
AMLBot explained that these differences reflect two very different enforcement philosophies. Tether works closely with law enforcement agencies and may freeze funds early in investigations to limit further losses. Circle limits its actions strictly to formal legal instructions.
The report also points out that while Tether’s proactive approach has helped recover funds tied to fraud, trafficking, and scams, it has raised concerns about centralized control and user rights. Circle’s model, while slower, is seen as offering clearer legal safeguards.
Overall, the findings show that stablecoins operate at the intersection of blockchain technology and traditional law enforcement, with each issuer choosing a different balance between speed, control, and legal certainty.
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