USDT in Wallets May Be Blocked. What to Do and How to Store Them in Russia

The largest and most popular stablecoin in the world is the USDT dollar token from Tether. Russia is no exception: crypto investors, traders on crypto exchanges, and businesses involved in foreign trade operations have been actively using it for many years.

The introduced crypto regulation in Russia is changing the internal rules for cryptocurrency transactions. Except for foreign trade, from July 1, 2027, crypto operations in the country will only be allowed through licensed intermediaries, and the Bank of Russia proposes to include three largest cryptocurrencies by market capitalization in the list of cryptocurrencies accessible to ordinary investors.

USDT, along with Bitcoin and Ethereum, has made it to the regulator's list. However, the State Duma has questioned the necessity of allowing this stablecoin on the Russian crypto market, as Tether, the issuer of USDT, blocks funds at the request of U.S. authorities.

Experts told <> about the risks faced by USDT holders in Russia if they store tokens in a personal wallet or on an exchange, whether stablecoins can be frozen or accounts blocked, and where to store this cryptocurrency more safely.

I Have USDT on an Exchange or in a Personal Wallet. Should I Worry?

Neither Tether, nor sanctions lists, nor exchange compliance see the <>, they see addresses and the history of coins, says Yuri Brisov, partner at Digital & Analogue Partners. According to him, the main questions are which addresses the USDT have passed through and whose wallet they are currently in. The expert described several scenarios.

In the first case, USDT is purchased on a foreign exchange and stored in a personal non-custodial wallet — the risks are minimal.

In the second case, if the coin's history includes a sanctioned exchange, crypto mixer, or dubious P2P counterparty — the risk is high.

The third option: USDT is purchased or stored through a Russian licensed intermediary. In this case, there is a risk of their being marked for sanctions. However, Tether is not necessarily going to block them, Brisov clarified.

Maxim Bokov, chief analyst at AML/KYT operator <>, explained that if a person already has USDT in a personal wallet, it is considered that this storage is conducted outside the Russian infrastructure. But after July 1, 2027, if it is necessary to exchange these USDT for rubles, it will only be possible to do so legally through Russian licensed participants, which may require confirmation of the legality of obtaining these funds, especially if the amount is large, the analyst added.

<<The new legislation does not prohibit storing cryptocurrency outside of Russia, nor using it outside the Russian framework. The only condition is that this should not be done using accounts in Russian banks. In this case, the cryptocurrency must first be transferred to one's account in a Russian digital depository and only then sold to another resident>>, clarified Bokov.

As for proving the legality of the origin of cryptocurrency, according to the expert, problems will only arise for those who cannot explain where it came from. There are no restrictions on transferring cryptocurrency from cold wallets or foreign crypto exchanges under Russian legislation, the analyst added.

Can My USDT Be Marked and Why?

It is not the tokens themselves that are marked, but the addresses, transactions, and connections between addresses, explained Alexey Nasonov, partner at the law firm Nasonov & Partners. This is done by analytical companies like Chainalysis, Elliptic, and TRM Labs.

The Western tracking system works like this: services assign labels to addresses (<>, <>, <>) and calculate what share of the coins at the address is linked to such sources, Brisov explained. According to him, this marking is used by Tether and all major global exchanges.

The Russian tracking system also exists, added the expert. According to him, starting from September 1, 2026, a licensed intermediary is required to assign characteristics to coins and addresses and assess the risk level of the operation before the transaction (or no later than three working days after), and the results may be sent to Rosfinmonitoring.

A label appears if tokens have passed through sanctioned platforms and wallets, through crypto mixers, the dark web, or hackers, if they were received from a counterparty with a bad history. According to the lawyer, the Russian intermediary has the right to refuse the operation, and the global exchange will freeze the assets.

With the emergence of a regulated Russian crypto infrastructure, an additional risk factor arises, says Nasonov. He noted that the origin of funds from the Russian regulated perimeter will be technically traceable on the blockchain.

After the 20th and 21st packages of EU sanctions, which effectively established a sectoral ban on Russian crypto, a foreign exchange, protocol, wallet, or AML provider will be able to determine the connection of funds with a specific Russian service and assess it considering the status of that service, the expert said. Moreover, modern blockchain analytics systems are capable of analyzing transaction chains across multiple addresses, he added.

In such a case, with a high probability, the addresses where USDT is acquired in the regulated Russian infrastructure will indeed be marked. For example, a foreign exchange may refuse to accept assets from them, Nasonov said.

Brisov pointed out that the Moscow Exchange, NRD, Sberbank, VTB, Alfa-Bank, and T-Bank are on the US Treasury's sanctions list, so if their depositories are created as subsidiaries, they fall under Western restrictions according to the 50% rule. Purchasing USDT through such an intermediary means a label of "connection with a sanctioned entity." Therefore, even legitimate tokens in Russia may be blocked by the issuer due to sanctions, the lawyer said.

But it should be understood that this problem is more for long-term investors—those who buy Bitcoin and plan to hold it for years, says Bokov. He explained that the marking does not appear instantly; it is necessary for the addresses to be found and identified.

Practice shows that the more sanctions are imposed, the harder it becomes to find new addresses of sanctioned exchanges, and the exchanges themselves continue to operate, changing their approach to liquidity management, Bokov noted. According to him, examples include the global exchange HTX, as well as Russian and Iranian crypto exchanges, some of which have not left the market while under sanctions for many years.

Calculating the infrastructure and addresses of exchange participants is not so simple, agreed crypto investigations and digital compliance specialist Grigory Osipov. He explained that this is due to both technical difficulties in applying measures to conceal infrastructure and the large number of such addresses among participants, which requires significant analytical and computational power.

Can Tether Freeze My Tokens

The issuer of USDT can freeze tokens on any wallet, including non-custodial ones. USDT is a centralized stablecoin, and its issuer retains administrative capabilities regarding its smart contracts and can blacklist any address, says Nasonov. After that, the USDT on that address effectively becomes blocked for further movement.

According to the expert, this is a feature of any American stablecoin, as the ability to freeze stablecoins is a direct requirement of the GENIUS Act in the USA. Tether complies with these rules, even though the company is registered in El Salvador.

Frozen tokens can be burned by Tether and reissued to another address, meaning that the tokens will disappear from the first wallet, Brisov added. Thus, in the summer of 2025, Tether froze $1.6 million in USDT in the Gaza sector and reissued them for the USA.

Nasonov noted that in practice, such measures are primarily applied in connection with sanctions, investigations by law enforcement agencies, and accusations of illegal activities. A notable Russian example is Garantex. In March 2025, Tether froze $26 million in USDT at the request of the U.S., which was linked to operations of the cryptocurrency platform.

At the same time, the expert pointed out that a personal non-custodial wallet of an ordinary user is a questionable target for U.S. law enforcement and for Tether. The entire volume of necessary procedural actions will not correspond to the result and the interest protected by the U.S., he explained. Moreover, the mere fact of the Russian origin of the funds is not an automatic basis for Tether to block USDT.

<<Blocking USDT on the wallets of a major sanctioned exchange — yes, blocking USDT in a large sanctioned protocol with billion-dollar turnovers — yes. But I see no point in blocking USDT on the personal wallet of an ordinary user>>, Nasonov said.

Can an account on a global exchange be blocked for transferring USDT purchased in the Russian market?

This is a quite likely scenario, believes Brisov. He outlined a chain of actions: the exchange will see an incoming transfer from the address of a Russian licensed intermediary, its compliance system will identify the counterparty, and if it is a sanctioned entity, the assets will be frozen automatically, the account will be limited, and documents will be requested. Account closure and reporting to the regulator are possible, the lawyer added. According to him, even if the wallet is not frozen, it will be marked as <>, and the outcome will depend on the specific exchange's risk appetite.

Exchanges in Asia and the UAE work with Russians but use the same Western analytics. According to the expert, they have already frozen many accounts related to payments from Russia, and small exchanges willing to take risks have started to significantly increase fees for accepting, exchanging, and transferring digital assets linked to Russia.

The principle will not only depend on whether USDT was purchased in Russia but also on which specific Russian operator they were purchased from and what sanction status this operator has, Nasonov agreed. He clarified that in practice, when funds arrive from a Russian service, a foreign exchange may request documents about the origin of the funds, delay the crediting or withdrawal, return the deposit, temporarily limit account operations, and in some cases, cease servicing the client (usually with the possibility of withdrawing funds to another wallet).

Bokov confirmed that everything depends on how the exchange will treat this cryptocurrency. For example, for transactions with the same HTX, if the exchange's compliance received information about a negative <> of such a transaction, in most cases, users are not blocked but simply the transfer is not accepted, it is sent back, and they are asked not to send such cryptocurrency again, the expert explained.

<<With Russia, the situation will likely be more complicated, but it is also solvable. After all, this is a very large market — the largest in Europe, it cannot simply be restricted>>, Bokov said.

Where is the best place to store stablecoins?

If USDT is needed for settlements with a counterparty abroad, it is better to use licensed services in friendly countries, believes Brisov. According to him, this is more expensive but more reliable. He also reminded that there are cryptocurrencies that cannot be frozen at all, such as Bitcoin and Ethereum. In his opinion, storing stablecoins in the Russian market is the riskiest option.

Nasonov believes that it is better to store assets in a personal non-custodial wallet — preferably on a hardware (cold) wallet, but software (hot) wallets are also acceptable. In this case, the user independently controls the private keys and does not depend on the financial state or account blocking by a specific exchange, as well as on the blocking of the exchange's wallets, the expert explained.

<<The risk of Tether blocking USDT on non-custodial wallets remains, but I assess it as low if you are not operating with huge turnovers and do not come into contact with protocols and addresses related to illegal activities>>, said Nasonov.

He then pointed out that the emergence of a legal Russian framework creates a second option. If one does not work with the global liquidity market, with DeFi, and complies with Russian restrictions (for non-qualified investors - a limited list of coins and up to 300,000 rubles per year through each intermediary), assets can be stored on a Russian regulated platform. Its advantages will be operating within the Russian legal framework and corresponding legal protection, clear origin of funds, and the ability to purchase cryptocurrency for rubles, the expert listed.

<<In any case, it will be useful to diversify storage methods rather than putting everything into one wallet. Additionally, it will be beneficial to keep documents confirming the origin of funds: statements, receipts, transaction history, information about cryptocurrency purchases, and transaction data>>, Nasonov warned.

So far, nothing new has happened for cryptocurrency users, added Osipov. He clarified that from the user's perspective, the <> has not yet formed: sanctions have not been introduced in a targeted manner, there are currently no exchange services, the use of foreign infrastructure is allowed, and the responsibility and restrictions on the use of custodial storage of digital currency will come into effect on July 1, 2027.

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