Key takeaways
- Tether and Circle can freeze every token at an address, on the blockchain itself. By July 2026, about $5.69 billion of USDT sat frozen across 9,597 addresses, two thirds of it on Tron.
- Freezes follow law enforcement requests, sanctions listings and the issuer's own risk decisions. Tether has frozen addresses on the US sanctions list since December 2023.
- Few freezes are reversed: of the addresses Tether froze in 2025, about 3.6% were later unfrozen, according to BlockSec.
- A business lowers its risk by knowing who it pays and who pays it, screening wallets, keeping its own funds at addresses only it uses, and converting large balances through regulated providers.
The short answer
USDT and USDC can be frozen because their issuers, Tether and Circle, built the ability into the token contracts. A freeze blocks every token of theirs at an address, and the address can't send them. Issuers freeze when law enforcement asks, when an address is on a sanctions list, and under their own terms when they judge it necessary. Tether's terms let it freeze tokens "as required by applicable Law or where Tether, in its sole discretion, determines it is prudent to do so".
For a business, the risk is less that your own wallet is frozen out of the blue, and more that you deal with a wallet that is, or that your provider holds a payment it links to one. Know who you pay and who pays you, screen wallets, and keep a record of where your funds came from.
How freezing works
On the issuer's contract. USDT's contract keeps a blacklist. When Tether adds an address, the tokens there can't move; Tether can later remove the address from the list, or destroy the frozen tokens. BlockSec counted $698 million of USDT destroyed in 2025, 55.6% of the value frozen that year. USDC works the same way: once Circle blocks an address, it can no longer send or receive USDC.
At a provider. Exchanges and payment providers can also hold an account or a deposit under their own compliance rules. The tokens aren't frozen on chain, but you can't reach them until the provider is satisfied. This is the more common experience for a business, and the easier one to resolve: answer the provider's questions about who sent the funds and why.
Only the issuer. A freeze on the contract can only be lifted by the issuer. No exchange, lawyer or recovery service can do it for you.
How often it happens
| Figure | Source | |
|---|---|---|
| USDT frozen in total | $5.69 billion across 9,597 addresses, as of 26 July 2026 | BlockSec |
| On Tron | $3.71 billion across 6,901 addresses | BlockSec |
| On Ethereum | $1.98 billion across 2,696 addresses | BlockSec |
| USDT frozen in 2025 | $1.26 billion across 4,163 addresses | BlockSec |
| USDT frozen, January to June 2026 | About $1.66 billion, in 2,463 freezes | BlockSec |
| Largest single freeze | More than $344 million across two addresses, April 2026 | Tether |
| USDC frozen, 2023 to 2025 | About $109 million across about 372 addresses | BlockSec |
Tether said in April 2026 that it had worked with more than 340 law enforcement agencies in 65 countries.
Why addresses get frozen
- Law enforcement requests. Tether says it freezes assets linked to illegal activity at the request of law enforcement, in cases of fraud, scams, hacks and other crime. So a victim who wants tokens frozen needs to report to the police first.
- Sanctions. Tether adopted a policy in December 2023 of freezing wallets on the US Treasury's Specially Designated Nationals (SDN) list, extending its sanctions controls to addresses outside its own platform. In April 2026, it froze more than $344 million across two addresses, acting on information from OFAC and US law enforcement; OFAC added the addresses to the SDN list the next day.
- The issuer's own judgment. Tether's terms also let it freeze tokens where it determines it is prudent, and if a wallet is subject to pending litigation or investigation. Circle's terms let it block addresses associated with illegal activity and freeze USDC under legal orders. BlockSec says Circle typically acts on explicit judicial orders.
Getting unfrozen is rare and slow
According to BlockSec, about 3.6% of the addresses Tether froze in 2025 were later unfrozen, with a median of 18.2 days between freeze and release for those that were. Tether's terms don't describe a process for contesting a freeze. If your address is frozen and you believe it's a mistake:
- Check what's frozen. Look up the address on a block explorer to see whether the token contract has blacklisted it, or whether it's your provider holding the funds.
- Gather the evidence: the address, network, amounts, transaction hashes, invoices and contracts showing where the funds came from, and your company's documents.
- Contact the issuer through its official support channels with that evidence, and consider a lawyer for large amounts.
- Ignore anyone who offers to unfreeze tokens for a fee. Recovery scams target people with frozen funds.
How a business lowers the risk
- Know your counterparties. Pay and accept stablecoins from companies you've identified, against invoices. An unexpected payment from an unknown wallet deserves questions before you accept it.
- Screen wallets before you pay a new address or accept a large payment. Blockchain analytics providers flag addresses linked to sanctions, scams and hacks; many payment providers screen deposits and withdrawals for you.
- Keep your own addresses to yourself. Use addresses that only your company uses, rather than shared or pooled ones, so another user's activity can't put your funds at risk.
- Don't leave large balances in a wallet longer than you need. Once converted to dollars or euros through a regulated provider, a balance can't be caught by a later freeze of a stablecoin address, and the conversion leaves a record of where the funds went.
- Keep records: who paid you, from which address, for which invoice. If an issuer or provider asks, you can answer the same day.
- Choose the token deliberately. Both issuers freeze. USDC's issuer is regulated in the US and the EU and publishes monthly reserve attestations; see USDT vs USDC for business.
If you've been scammed and the tokens are still at the scammer's address, report it to the police immediately with the transaction hash: a freeze is only possible while the tokens are still somewhere the issuer can block. See what to do if you send USDT or USDC to the wrong network or address.
How this works with Align
Align supports USDC, USDT and EURC. When you receive stablecoins into your stablecoin business account, Align may ask who sent them and from which wallet, and you can convert them and pay out in USD, EUR, GBP or AED from named accounts in your company's name, so large balances don't need to sit in a wallet. If you want to accept USDC or USDT directly from customers, ask Align first, before you put a wallet address on an invoice.
Sources
- BlockSec, USDT freeze 2026: who's frozen, how to check, live data (26 July 2026)
- BlockSec, $1.26 billion of USDT frozen in 2025
- Tether, Terms of service (updated 26 February 2026)
- Tether, Tether introduces new policy to strengthen ecosystem security (December 2023)
- Tether, Freeze of more than $344 million in coordination with OFAC (23 April 2026)
- Circle, USDC terms (accessed November 2026)
Common questions
- Can Tether or Circle freeze my wallet?
- They can freeze their own tokens at any address: USDT for Tether, USDC and EURC for Circle. Once an address is frozen, the tokens there can't be moved, and the address can't send them. Other assets at the same address, such as ETH or TRX, aren't affected.
- If I receive USDT from a wallet that's later frozen, are my tokens frozen too?
- Not automatically. A freeze applies to an address, not to tokens that have already left it. But your provider may hold a deposit it links to illicit funds, and if your own address is linked to the activity, the issuer may freeze it too. That's why screening who pays you matters.
- How do I check whether an address is frozen?
- Look up the token contract on a block explorer such as Etherscan or Tronscan. USDT's contract records frozen addresses in a blacklist that the explorer can query, and services such as BlockSec's USDT freeze checker do this for you.
- My exchange account is frozen. Is that the same thing?
- No. An exchange or payment provider can hold your account or a deposit under its own compliance rules, while the tokens stay unfrozen on chain. Ask the provider what it needs: usually the source of the funds and who sent them.
- Someone offers to unfreeze my USDT for a fee. Is it real?
- No. Only the issuer can unfreeze tokens at the contract level. Services that promise a guaranteed unfreeze for an upfront fee are scams.
This guide is general information, not legal, tax or financial advice. Rules and providers' terms change; check the sources linked above and take advice on your own situation.