Tether announced Thursday that it is teaming up with blockchain surveillance firm Chainalytic to monitor transactions involving its tokens on secondary markets. The move aims to strengthen Tether’s ability to identify and address potential risks associated with illicit activities, including terrorist financing and sanctions evasion.
Monitoring systems, including international sanctions compliance and illegal transfer detection, enable Tether to identify cryptocurrency wallets that may pose a risk or be linked to illegal and/or sanctioned addresses. Tether CEO Paolo Ardoino emphasized the importance of this collaboration in promoting transparency and security within the cryptocurrency industry.
The partnership comes amid growing regulatory pressure on Tether globally and concerns that USDT is playing a role in circumventing international sanctions and facilitating illicit finance. There were reports that Venezuela’s state-owned oil company used USDT to circumvent US sanctions, and a UN report highlighted the involvement of stablecoins in underground banking and money laundering in East and Southeast Asia.
USDT, with a circulating supply exceeding $110 billion, maintains a peg to the US dollar and is primarily backed by US Treasury bonds held in reserves managed by Cantor Fitzgerald. Tether recently reported first-quarter revenue of $4.52 billion, highlighting its reputation in the cryptocurrency market despite regulatory issues.
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