Tether freezes $45 million in USDT linked to Xinbi, prompting shift to USDD

Tether has frozen more than $45 million in USDT across at least 22 operational wallets linked to the sanctioned Xinbi Guarantee marketplace. The action, reported by blockchain analytics firm Bitrace on September 9, targets deposit, routing and withdrawal addresses used by Xinbi and its affiliates.

Scope of the freeze

Bitrace identified frozen USDT in wallets used for receiving deposits, intermediate transfers, and outgoing hot wallets operated by Xinbi’s payment service Xpay. Third‑party operators with financial ties to Xinbi were also affected, including an OTC service that processed over $72 million in the prior year.

Comparison with prior actions

The breadth of the freeze differs from a 2024 operation against Huione Group, where only a single address holding about $29.6 million was frozen while other operational wallets remained functional.

Xinbi’s response

After the initial freeze, Xinbi activated replacement USDT addresses, but these were frozen again within 12 hours, leaving roughly $37,839 USDT stranded. Facing repeated disruptions, Xinbi announced it would accept only USDD for deposits, moving away from Tether’s USDT.

Why USDD matters

USDD is a US‑dollar‑denominated stablecoin with about $1.5 billion in circulation on Tron and Ethereum. Its protocol claims the token is over‑collateralized, decentralized and cannot be frozen at the address level, unlike USDT.

Implications for enforcement

While USDD cannot be blacklisted directly, moving, exchanging, or cashing out the token still relies on centralized exchanges, bridges and OTC desks that remain vulnerable to law‑enforcement action. The next phase of the crackdown will likely focus on disrupting the infrastructure surrounding USDD rather than the token itself.