Tether, Tron and TRM Labs wound down the T3 Financial Crime Unit (T3 FCU) in late August without a public announcement. The shutdown came roughly two months before the $6.3B Binance hack.
What T3 FCU was
T3 FCU launched in September 2024 as a public-private initiative to identify and freeze illicit USDT on the Tron blockchain, according to Tether's announcement. The unit worked directly with law enforcement in 23 jurisdictions across five continents, including the US, Spain, Germany, Brazil and the UK.
Each partner had a distinct role, as described by TRM Labs:
- TRM Labs: real-time tracing of funds across wallets, chains and jurisdictions
- Tron: network visibility over a chain carrying more than $88B in circulating USDT
- Tether: issuer-level authority to freeze addresses on-chain
The full sequence, from law enforcement request to frozen wallet, ran within 24 hours, including during account takeovers, kidnappings and extortion cases.
What the unit froze
In August 2025, the unit reported more than $250M frozen and launched the T3+ partner program, with Binance as its first member.
Action | Amount frozen |
|---|---|
Madrid money laundering network (Guardia Civil, 2025) | $26.4M in USDT |
Operation Lusocoin (Brazilian Federal Police) | 4.3M USDT |
Assets linked to the Bybit hack | about $9M |
First joint case with Binance (pig-butchering scam) | about $6M |
Total reported in August 2025 | over $250M |
Total reported in May 2026 | over $450M |
In 2025, the unit intercepted 43.9% more illicit proceeds than the year before. Agencies in the US, Spain, Germany, the Netherlands and Bulgaria led by blacklisted volume.
FATF recognition
In its November 2025 Asset Recovery Guidance, FATF cited T3 alongside TRM's Beacon Network as leading models for public-private partnership. FATF called the unit an "invaluable resource for law enforcement agencies worldwide."
In the May 14, 2026 release, Tether CEO Paolo Ardoino said "this $450 million milestone is just the beginning of what T3 is capable of." The unit was wound down about three and a half months later.
Freeze authority stays with Tether
The power to freeze USDT sits with Tether as the issuer, not with the unit. In April 2026, Tether froze $344.2M in USDT across two wallets attributed to the Central Bank of Iran in coordination with OFAC, according to TRM Labs.
The GENIUS Act, signed in July 2025, authorizes the Treasury Secretary and the Attorney General, acting jointly, to direct the seizure or burning of stablecoins used in significant sanctions or federal criminal violations. Reissuance of funds to victims is not yet defined in statute.