- Tether freezes $435 million in USDT to assist U.S. law enforcement, marking a significant move to combat illicit activities and enhance security in the crypto space.
- Responding to regulatory concerns, Tether implements a “wallet-freezing policy” and strengthens KYC/AML measures, underlining its commitment to transparency and compliance.
- Tether’s strategic initiatives, including the imminent Shibarium launch and collaboration with global law enforcement, position the company as a proactive leader in setting industry standards for a secure crypto environment.
Tether, the world’s largest stablecoin issuer, has taken significant steps to cooperate with U.S. law enforcement agencies in combating illicit activities. The company has frozen 326 wallets containing $435 million worth of Tether (USDT) to assist authorities, including the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Secret Service.
Cooperation with U.S. Authorities
Tether’s proactive stance is a response to concerns raised by Senator Cynthia M. Lummis and Congressman J. French Hill regarding the potential misuse of stablecoins for illicit activities such as money laundering and terrorist financing. In two letters addressed to the lawmakers, Tether CEO Paolo Ardoino emphasized the company’s commitment to becoming a “world-class partner” to the U.S. in expanding dollar hegemony globally.
The Wallet-Freezing Policy
To prevent the illicit use of USDT, Tether implemented a “wallet-freezing policy” on December 1. This policy involves freezing all wallets listed on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list. Tether considers this move a “historic milestone,” setting a precedent in the industry by expanding sanctions controls to the secondary market.
Strengthening Compliance Measures
Tether highlighted its robust know-your-customer (KYC) and anti-money laundering (AML) program, which undergoes Title 31 examinations conducted by the Internal Revenue Service (IRS) on behalf of the Financial Crimes Enforcement Network (FinCEN). The stablecoin issuer collaborates with third-party services like Chainalysis and WorldCheck for due diligence, background checks, and continuous monitoring of customer information.
Global Efforts and Cooperation
Tether has engaged with 19 jurisdictions globally, actively assisting ongoing investigations and providing information to law enforcement agencies. The company has frozen funds associated with hacks and thefts, totaling 800 million USDT. Moreover, Tether has cooperated with Israel’s anti-terrorist financing agency to identify and freeze wallets linked to terrorist organizations.
Shibarium Launch and Future Prospects
The imminent launch of Shibarium in January 2024 is expected to further reduce SHIB’s circulating supply, potentially driving up its value. Tether’s strategic moves, including freezing significant amounts of USDT and enhancing compliance measures, indicate a proactive approach to support law enforcement and contribute to a more secure crypto environment.
In conclusion, Tether’s actions reflect its dedication to transparency, compliance, and collaboration with global authorities in the ongoing efforts to combat illicit activities associated with stablecoins. The company’s commitment to being at the forefront of industry standards sets a notable precedent for others in the crypto space.
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