PARIS, Feb 27 (Reuters) - El Salvador-based stablecoin issuer Tether said it has frozen about $4.2 billion of its crypto tokens over links to "illicit activity", mostly in the past three years, as authorities around the world try to crack down on crypto-related crime.

The world's largest stablecoin company, which has more than $180 billion of its dollar-pegged token in circulation, up from around $70 billion three years ago, is able to remotely freeze its tokens held in users' crypto wallets when asked to do so by law enforcement.

Tether said this week it had helped the U.S. Justice Department freeze nearly $61 million worth of its tokens, called USDT, which were linked to "pig-butchering", a form of fraud in which scammers form a personal relationship with their victims.

That brought its total frozen assets linked to illicit activity to $4.2 billion, of which $3.5 billion has been frozen since 2023, a spokesperson for Tether said in emailed comments late on Thursday.

Tether has also previously said it had blocked wallets linked to human trafficking, and "terrorism and warfare" in Israel and Ukraine. Sanctioned Russian crypto exchange Garantex said last year Tether had blocked funds on its platform.

Authorities around the world have long raised concerns about the role of crypto in illicit finance. The Financial Action Task Force (FATF) last year called on countries to take stronger action to combat illicit finance in crypto markets, which are generally less regulated than mainstream financial markets.

Money launderers received at least $82 billion in cryptocurrencies last year, up sharply from just $10 billion in 2020, partly driven by growth among Chinese-speaking groups, blockchain researchers said in January.

Stablecoins are mostly used in crypto trading, and their volumes have surged in recent years.