Stablecoin Freeze Case Analysis: Beware of Terrorism Financing Threats

Author: Bitrace

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Restricting specific blockchain addresses from operating with certain stablecoins is a common method for stablecoin issuers to cooperate with law enforcement. Over the past few years, stablecoin issuers Tether and Circle have established mature communication and cooperation channels with global law enforcement agencies, creating a strong deterrent against malicious entities and individuals using cryptocurrencies for illegal activities. Bitrace monitoring data shows that the number of on-chain addresses frozen in 2025 has reached a record 3,958, surpassing the total of 3,199 over the past four years. This article aims to analyze specific freezing cases to warn the industry about this financial threat.

2026 First Teda Address Blacklist Analysis On January 1, 2026, USDT issuer Tether blacklisted six addresses on the Tron and Ethereum blockchains. Tracing the funds of the address TKWBiXWm8fNMBxBLaEXnQM1TPDbCLbZC7i revealed that this cooperation was related to the Israel National Bureau for Counter Terror Financing(. The main source of funds involved multiple previously blacklisted blockchain addresses. According to the NBCTF official website, four of these addresses appeared on the Seizures of Cryptocurrency list with addresses ASO 41/25, ASO 50/25, and ASO 51/25, and were frozen by Teda between August 4 and September 30, 2025. More detailed administrative seizure orders show that these addresses are related to terrorism financing.

War-induced sanctions and freezing waves As military conflicts in Israel and surrounding areas enter their third year, related offensive measures have extended to the blockchain. Bitrace monitoring data indicates that from 2021 to 2025, the Israeli government sanctioned a total of 1,687 blockchain addresses or exchange accounts. Almost all administrative orders occurred during the 2023-2025 war period, with sanctions mainly targeting terrorist entities or their financing channels. Further observation of some stablecoin addresses also reveals that the freezing times generally predate the announcement of sanctions, indicating that Teda was involved in law enforcement cooperation activities much earlier. Clearly, real-world regional conflicts will continue to merge with on-chain warfare in the future.

Beware of terrorist funding threats During past investigations, we noticed that cryptocurrency-based terrorist financing is often associated with industry infrastructure such as cross-chain bridges, centralized exchanges, and crypto payment platforms. Large amounts of illegal funds are transferred and stored through these channels, posing compliance risks to industry entities. Taking these sanctioned addresses as an example, further analysis of their upstream sources shows many small transfers from centralized exchanges, which are then collected and transferred in batches to specific addresses and exchange accounts. For exchange risk control departments, it is crucial to pay close attention to these contaminated user funds to prevent legal investigations and potential compliance challenges targeting the platform.