USDT Freezing Incident: A Large Financial Group in Cambodia Suffered Heavy Losses

In the cryptocurrency field, the centralized stablecoin USDT is often used as a tool for law enforcement and security incident handling due to its special properties. Recently, an address under a large financial group in Cambodia was frozen with nearly 30 million USDT, attracting industry attention. This article will provide an in-depth analysis of this incident.

Event Background

This financial group is one of the largest cryptocurrency enterprises in Cambodia, with operations covering multiple sectors including cryptocurrency wallets, payments, trading guarantees, insurance, and exchanges. Its core payment and guarantee services heavily utilize USDT, with influence spreading across Southeast Asia and even East Asia.

According to monitoring by data platforms, from June 2022 to June 2024, the monthly funding scale of the group's related business addresses showed an upward trend, increasing from a minimum of 1.03 billion USDT to a maximum of 8.39 billion USDT, with a total funding scale of 102.397 billion USDT over the two years. During the same period, the average daily balance of these addresses remained around 35.68 million USDT.

However, due to the presence of criminals in the Southeast Asian region using cryptocurrency for illegal activities, the business address of the group inevitably faces a certain degree of impact. Taking one of its core business addresses as an example, during the period from July 2023 to June 2024, nearly 20% of the funds flowing into that address were high-risk funds.

Frozen Event Analysis

On July 13, 2024, an address on the TRON network was restricted, with 29.62 million USDT frozen and unable to be transferred. After investigation, it was found that the address had been created only five days prior, and its total transaction volume had exceeded 1 billion USDT, primarily receiving deposits from users of the group and official addresses.

Further investigation revealed that the freeze may be related to a theft incident at a certain exchange in Japan. The stolen assets were converted through cross-chain exchanges into the payment system of the financial group. Specifically, about 610 bitcoins were transferred to other chains through different cross-chain bridges, exchanged for approximately 31.82 million USD in stablecoins, and ultimately about 14 million USD flowed into the frozen address.

It is worth noting that some of the funds in another exchange theft incident are also associated with the group. In early June 2024, at least 1.05 million involved USDT flowed into the group's user addresses and entered multiple official business addresses.

Impact of Freezing and Subsequent Response

The frozen 29.63 million USDT accounts for 75% of the group's reserves, putting some pressure on its business. 2.5 hours after the freezing event, the group activated a new business address to handle user demands and received a small amount of funds transferred from the frozen address.

The newly activated address has reached a transaction scale of 733 million USDT in a short period. Analysis shows that the address has experienced a significant outflow of funds, but the group timely replenished reserves from other business addresses, which basically meets users' withdrawal requests. As of the time of analysis, the new address still has a balance of 12.88 million USDT.

Conclusion

This freezing incident once again highlights the role of centralized stablecoins in law enforcement and risk management, while also reflecting the compliance challenges faced by the cryptocurrency industry. For large financial institutions, strengthening risk management and enhancing the scrutiny of funding sources will be important topics in the future.