US Treasury sanctions 134 ISIS-K crypto wallets, Tether freezes $1.4M

The sanctions follow a pattern. OFAC originally designated ISIS-K as a Specially Designated Global Terrorist in 2015. Its media arm, al-Azaim Media Foundation, has openly solicited cryptocurrency donations. The July 1 action comes after a June 2026 OFAC designation targeting a different ISIS financial facilitator network, and before that, Treasury went after closed networks of ISIS financial operatives in 2023.

Tether’s same-day freeze is the headline within the headline. The largest stablecoin issuer, with over $100 billion in circulating supply, acted as an enforcement partner the moment OFAC published the list.

The Monero angle is worth watching. Those three addresses cannot be frozen the way USDT on TRON can. That asymmetry is exactly what makes regulators uncomfortable and what privacy advocates argue is necessary for legitimate financial privacy.

For virtual asset service providers, the compliance burden just got heavier. Every exchange and on-ramp now needs to screen against 134 fresh addresses. Every custodial wallet provider faces the same requirement. Failure to carry that check carries real legal risk, not just in the US but in any jurisdiction that recognizes OFAC designations.