Tether and Circle Freeze Wallex-Linked Stablecoin Wallets

Stablecoin issuers Tether and Circle have blacklisted wallet addresses associated with Wallex, a cryptocurrency exchange operating in Iran, freezing access to millions in digital assets and highlighting the intersection of blockchain technology and international sanctions. The action, first identified by blockchain investigator ZachXBT on March 25, targeted an Ethereum-based wallet holding approximately 117,000 in USDT and USDC stablecoins, rendering those funds immovable on the respective networks.

According to onchain data, the blacklist prevented any transfers to or from the affected addresses, a standard compliance mechanism built into the smart contracts of both stablecoins. Tether, which issues USDT, and Circle, issuer of USDC, acted in coordination, a move that underscores their adherence to U.S. sanctions frameworks enforced by the Office of Foreign Assets Control (OFAC). While Wallex itself has not been formally designated by OFAC, transactions involving Iranian entities fall under broad prohibitions that apply to U.S.-linked companies like Circle and, by policy, offshore-registered Tether.

In response to the freeze, Wallex initiated a rapid consolidation of assets from...