A single Tron address received 120.2 million $USDT on June 11 and immediately began distributing funds across multiple platforms.
Blockchain investigator ZachXBT traced the activity and flagged it publicly. Later, Tether blacklisted a related address holding 72 million $USDT, effectively freezing the remaining funds on-chain.
How the Money Moved
The entity moved capital quickly across several routes before Tether acted:
- Over $17.5 million transferred to KuCoin deposit addresses
- $8 million sent to instant exchange services
- Another $8 million bridged from Tron to Bitcoin and Ethereum via Near Intents
Alongside these transfers, the entity placed large Monero buy orders that pushed XMR’s price from $330 to $430 in a matter of hours, a surge of over 25% driven entirely by a single buyer rather than organic market demand. At press time, the coin is trading at $378, an increase of 8% over the past day.
How Tether Froze the Funds
Tether controls an administrative function on the $USDT smart contract that allows it to blacklist any address. Once blacklisted, the contract blocks every transfer to and from that wallet. The holder retains the private keys and technically owns the tokens, but cannot move them anywhere. Contract control overrides key control.
Tether monitors on-chain flows in real time, often alongside compliance partners, including TRM Labs, allowing it to identify and freeze related addresses within minutes of suspicious activity being flagged.
KuCoin Surfaces Again
KuCoin appearing in this flow is interesting. ZachXBT has flagged the exchange repeatedly throughout 2026 for hosting laundered funds, including proceeds linked to cybercriminals. More than $17.5 million landing in KuCoin deposit addresses from this wallet adds to that pattern.
The instant exchange services used in the transaction, platforms that swap assets quickly with minimal or no KYC requirements, serve a specific function in money laundering flows by breaking the direct chain between a source wallet and a known exchange deposit address.
What the Incident Reveals
The incident highlights the limits of post-transfer intervention. While Tether was able to freeze $72 million, tens of millions of dollars had already been routed through exchanges, bridges, and other services before the blacklist took effect.
Related: Peter Schiff Says Tether Will Surpass Ethereum and Bitcoin