Tether Freezes $182 Million in Stablecoins as Reports Point to Heavy Crypto Use by Venezuela

Over the weekend, the Wall Street Journal reported on the use of coins, particularly Tether’s USDT, to evade sanctions imposed by the United States on Venezuela. The report shows that PdVSA, the country’s state-owned oil company, began requiring payments to be made in USDT in 2020, and about 80 percent of the country’s oil revenue now comes in the form of a stablecoin.

Notably, Tether also launched USDT stablecoin worth 182 million to 5 different addresses on the TRON blockchain on Sunday. At this time, it is unclear whether these funds were linked to the project to avoid sanctions by the Maduro regime. In a statement provided to The Block, a spokesperson for Tether revealed that these funds are indeed related to a law enforcement investigation that has dragged on for months.

The departure from Tether is one of the largest amounts of USDT that a stablecoin producer will set in one day. According to reports, it represents a larger number of dollars than its nearest competitor, Umbuthano, which has been frozen throughout its history.

While Bitcoin was created to avoid much of the centralized control associated with the traditional banking system, stablecoins do not operate in the same decentralized manner. These dollar-pegged tokens require a central issuer behind them that holds the reserves, and are not nearly as audit-proof as native bitcoin. Stablecoins like USDT and Circle’s USDC have backdoors built into them to allow their regulators to do things like freeze money allegedly associated with illegal activity, which some banks see as an advantage over permissionless Bitcoin.

The crypto industry has become one place around stablecoins, which has created tension between tech entrepreneurs who want to use them to create useful products and more philosophical cypherpunks who want to stick to Bitcoin’s original idea of ​​distributing places to end users.

In many ways, stablecoins are the most obvious example of how blockchain technology is now being used to reinforce existing power structures, such as US financial dominance around the world. Indeed, US Treasury Secretary Scott Bessent has previously indicated that this is the main value proposition of stablecoins from the perspective of the federal government. Of course, the USD1 stablecoin associated with Trump is also among the notable corruption allegations related to the pardon of the former CEO of the crypto exchange.

Recent projects report that stablecoins could grow to a 3.7 trillion market by the end of the decade. That situation becomes more possible with the passage of the GENIUS Act.

A thriving stablecoin ecosystem will drive demand for private US Treasuries, which back…

– Treasury Secretary Scott Bessent (@SecScottBessent) June 17, 2025

As shown by a recent report from the blockchain analytics firm Chainalysis, Venezuela is not alone in its use of stablecoins to avoid sanctions, as the nation-state was the main cause of the large profits in illegal crypto transfers that followed last year. And despite the more regulated and centralized nature of stablecoins, they are increasingly taking a larger share of the Internet’s illegal transaction pie, accounting for 84% of flows by 2025.

The increased acceptance of stablecoins is a double-edged sword, as it effectively allows dollars to move freely around the world. On the other hand, this additional service provided by stablecoins increases the demand for US debt, since these government bonds make up a large part of stablecoin reserves. On the other hand, the less regulated nature of the digital dollar means it is better placed to avoid money laundering and sanctions. For now, the regulatory structure where issuers are not required to collect individual data for each stablecoin is allowed to continue.

Notably, another blockchain analytics company, TRM Labs, released a report last week showing two crypto exchanges in the United Kingdom were used to help fund Iran’s Islamic Revolutionary Guard Corps (IRGC). Tether’s USDT was also in the middle of this sanctions avoidance program.

While crypto can be useful for regimes seeking to avoid economic sanctions and restrictions imposed by the US, it may also limit the ability of these targeted regimes to control their people’s finances. For example, stablecoins such as USDT give those who would otherwise be caught in a sharp decline in the Venezuelan bolivar or the Iranian rial the ability to use a stable currency that allows access to the global economy and has fewer restrictions on how it can be used.

JUST IN: 🇷🇺 Russian President Vladimir Putin’s adviser says the US is using crypto and stablecoins as a way to pay off its $35 trillion debt. pic.twitter.com/Lp8VGlItib

– Crypto Briefing (@Crypto_Briefing) September 8, 2025

As crypto has evolved since the launch of the Bitcoin network in 2009, it is clear that this financial technology is increasingly in line with the dynamics of the world. China has recently enabled interest rates on its digital yuan currency, and Russia has been adamant that the US is not helping the crypto industry. Additionally, there is a Russian ruble-pegged stablecoin that has seen the most growth of any other stablecoin in the past year and is being used to avoid sanctions, according to blockchain analytics firm Elliptic.

Of course, many of the biggest banks and tech giants in the world also have plans to use stablecoins to increase their levels of economic dominance. That said, Bitcoin still exists as a niche for those who still care about the original goal of taking third-party trust out of the equation entirely.