An executive at Circle told Congress this week that he hopes the U.S. Treasury will consider taking action against Tether.
Caroline Hill, Circle’s senior director of global policy and regulatory strategy, testified Thursday before the House Subcommittee on Digital Assets, Financial Technology and Inclusion.
Circle issues USDC, the second largest stablecoin by market capitalization.
Rep. Wiley Nickel (D-North Carolina) asked Hill about Tether, which issues the leading stablecoin USDT.
“Cantor Fitzgerald, an American financial services company, reportedly manages Tether’s $72 billion Treasury portfolio, giving Tether access to the U.S. dollar. It is unacceptable that Cantor promotes terrorism and illegal activities around the world. Mr. Hill, given Tether’s ties to the U.S. financial system through Cantor Fitzgerald, does the Treasury already have the authority to take action?”
Hill Called She believes the Treasury Department has the authority to take action against Tether, given the company’s “U.S. contact” through Cantor Fitzgerald.
“And I hope they take seriously Tether’s reputation and the data showing their contribution to terrorist financing and other malign activities.”
Cantor CEO Howard Lutnick told Bloomberg in January that the company was managing “a lot” of Tether’s assets. Lutnick also vouched for Tether’s balance sheet, claiming “they have the money they say they have.”
In her testimony, Hill also argued that stablecoins pegged to the dollar should share U.S. value.
“I personally believe that no company should be allowed to reference the U.S. dollar without placing democratic values within the company, i.e. inside the U.S. dollar-backed stablecoin. So, if the Treasury thinks it needs additional authority to look at this, I think this committee should consider that as well.”
The United Nations Office on Drugs and Crime (UNODC) claimed in a report earlier this year that criminals in East and Southeast Asia prefer using USDT on the Tron (TRX) blockchain because of its stability, ease of use, anonymity, and low transaction fees.
UNODC said fraudsters and money launderers tend to channel USDT through online gambling platforms, which often operate illegally.
The UN report included Tether freezing $225 million worth of USDT in certain Southeast Asian wallets after a U.S. Department of Justice (DOJ)-led investigation last November alleged the addresses were linked to a “pig slaughter” romance scam. So I cited several examples. .
However, Tether refuted UNODC’s claims, pointing to recent cooperation with law enforcement agencies. The company says USDT allows every transaction to be “meticulously” tracked, making the asset an “unrealistic choice” for illicit financing.
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