Tether has frozen about $72 million in USDT after a reported $120.2 million USDT transfer on the Tron blockchain was flagged by blockchain investigator ZachXBT and linked to suspected laundering flows into Monero. ZachXBT traced the funds across several routes, including more than $17.5 million to KuCoin deposit addresses, about $8 million to instant exchange services, and another roughly $8 million bridged from Tron into Bitcoin and Ethereum-linked paths.
The key link came on the Monero side, where large XMR purchases were tied to the same flow, with Monero briefly rising toward the mid $430 range before falling back closer to the mid $350s. That conversion matters because Monero is designed to obscure wallet balances and transaction trails, unlike Tron-based USDT. The wallet reportedly received the funds on June 11 and quickly began moving them onward before Tether blacklisted a related address holding the remaining balance. That helps explain why only part of the original flow was frozen, while funds already moved, swapped, or bridged were harder to contain.