Tether says its response kept stolen USDT out of North Korea's reach, but investigators found attackers had already converted hundreds of millions into other cryptocurrencies.

Tether froze more than $1.5 billion in stolen USDT within 30 minutes of Binance's Oct. 29 hack, highlighting stablecoins' ability to disrupt cryptocurrency theft.

In a Nov. 2 statement, the world's largest stablecoin issuer said its intervention prevented the immobilized funds from being transferred or laundered by attackers linked to North Korea.

The announcement followed an Oct. 31 FBI alert attributing the theft of more than $6 billion from Binance to North Korea's TraderTraitor hacking operation, which US authorities have linked to efforts to finance the country's weapons programs.

Tether CEO Paolo Ardoino said the incident demonstrated why USDT was an unattractive vehicle for criminals, arguing that the company's ability to rapidly block suspicious addresses made it difficult for attackers to retain access to stolen assets.

The intervention also prompted a broader debate about stablecoins' effectiveness in combating financial crime.

Rayne Steinberg, co-founder of digital asset investment firm Arca, contrasted Tether's response with traditional banks' histories of processing illicit transactions, arguing that financial institutions have often identified money laundering only after funds had already moved through their systems.

Steinberg pointed to major banking scandals involving sanctions evasion and criminal proceeds, questioning the criticism frequently directed at stablecoins over their potential use in illicit finance.

“Turns out a ledger you can actually see beats a duffel bag you can't.”

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