Tether reiterated its commitment to cooperate with U.S. law enforcement and regulators to combat illegal activity.
Stablecoin issuer Tether plans to strengthen its crackdown on illegal cryptocurrency trading by sharing a recent letter with members of the U.S. House Financial Services Committee and the U.S. Senate Banking, Housing and Urban Affairs Committee.
In the first letter, Tether focused on know-your-customer (KYC) and compliance efforts, explaining that the startup had “created a dedicated compliance department that operates a robust KYC/AML program.” The company also said the IRS investigated its KYC program on behalf of FinCEN.
The stablecoin provider also said it uses the Reactor tool from cryptocurrency marketplace operator Chainalytic, which sends reports on transactions made on Tether’s secondary markets.
The Reactor tool reportedly helps Tether analyze blockchain transactions to identify wallets associated with problematic activity or funding what the U.S. government deems terrorist groups (such as Hamas and Hezbollah).
“Tether is committed to using these tools to identify potentially suspicious transactions. “We actively reach out to law enforcement and counter-terrorism financing agencies to inform them of any suspicious activity or wallets.”
Tether cooperates with law enforcement to shut down wallets with suspicious transactions
Per Tether’s second open letter, which is still being addressed to Senator Cynthia Lummis and Representative J. French Hill from Arkansas, the platform says it cooperates with the U.S. Secret Service and the Federal Bureau of Investigation (FBI) to fund illegal activities. To do this, we are tracking parties that use stablecoins. Return funds from thieves to victims.
The letter also details Tether’s efforts to freeze 326 wallets through a recently enacted policy that were reportedly carrying approximately 435 million USDT, a joint effort with the U.S. Department of Justice, Secret Service, and FBI.
“Complying with the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list is not just a compliance measure, it is a proactive stance on security. “By extending sanctions controls to secondary markets, we are setting an industry-leading precedent for foresight and vigilance.”
Excerpt from Tether’s letter to Senator Lummis and Representative Hill
The company said it has “set a new standard in our commitment to security” and is focused on building relationships with law enforcement in the hope that the industry will follow suit.
Tether expects cooperation with financial regulators to be “the norm, not the exception.”