Key Takeaways:
- Tether Intensifies Efforts to Combat Illicit Crypto Activities Through Enhanced Collaboration with Law Enforcement
- Recently, Tether announced that it had begun a voluntary wallet-freezing policy.
In a proactive move to strengthen its stance against illicit crypto transactions, stablecoin issuer Tether has taken significant steps, including sharing letters sent to members of the U.S. House Financial Services Committee and the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
These communications, dispatched on November 16 and December 15, outline Tether’s unwavering commitment to combating the illicit use of stablecoins. The initiative follows calls from Senator Cynthia Lummis and Representative French Hill in October, urging the Department of Justice (DOJ) to scrutinize the extent to which both Binance and Tether may be supporting terrorism.
Central to Tether’s strategy is a close collaboration with law enforcement agencies, building on past assistance to entities such as the Department of Justice, Secret Service, and FBI, resulting in the freezing of over $435 million worth of funds.
The company has now expanded its partnerships by onboarding the Secret Service and is in the process of doing the same with the FBI.
Making these letters public, Tether CEO Paolo Ardoino emphasized the company’s ambition to be a “world-class partner” to the U.S., intending to contribute to the global expansion of the dollar’s influence.
This increased collaboration with law enforcement comes in response to October’s urging by U.S. Senators for the DOJ to investigate Tether for alleged facilitation of terrorism financing and sanctions violations.
Despite denying these allegations, Tether remains steadfast in its commitment to combating criminal activities.
In one of the letters, Tether addressed its emphasis on regulatory compliance, particularly in implementing robust know-your-customer (KYC) measures.
The company highlighted its dedicated Compliance Department and a strong KYC/AML program, which has undergone examination by the Internal Revenue Service (IRS) on behalf of the Financial Crimes Enforcement Network (FinCEN).
Tether also revealed the utilization of a reactor tool from Chainalysis, a crypto market activity analysis firm. This tool aids Tether in scrutinizing blockchain transactions to identify wallets associated with problematic activities or funding entities classified as terrorist groups by the U.S. government, such as Hamas and Hezbollah.
CEO Paolo Ardoino underscored Tether’s recent wallet-freezing policy, which has already restricted access to over 200 wallets linked to illicit activities, freezing tokens valued at $3.5 million.
Additionally, on December 9, Tether announced the initiation of a voluntary wallet-freezing policy, providing secondary market controls to freeze activities connected with individuals sanctioned by the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
In summary, Tether aims to fortify its system against abuse and contribute to enhancing integrity within the crypto industry through a combination of strengthened policies and enhanced collaboration with law enforcement agencies.
