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Tether will work with the FBI to monitor compliance with sanctions

Market and Events: Tether will work with the FBI to monitor compliance with sanctions

Tether, the creator of the popular USDT stablecoin, has taken a proactive approach to addressing concerns about illegal use of its cryptocurrency. The company recently sent letters to US lawmakers urging the Department of Justice to intervene in the fight against misuse of its stablecoin.

The letters were in response to statements by Senator Cynthia Lummis and Representative French Hill, who called on the Department of Justice to carefully evaluate the extent to which #Binance and #Tether provide material support and resources for terrorism. These claims were prompted by a coordinated Hamas attack on Israel on October 7, which was believed to have been partly financed by illicit cryptocurrency transactions.

In its response, Tether emphasized its commitment to compliance and outlined the measures it takes to prevent illegal activity. The company highlighted its Know Your Customer (#KYC) program, transaction monitoring system, and proactive approach to identifying suspicious accounts and activity.

“We have always assisted law enforcement when called upon to act, and we remain fully committed to continuing to actively work with agencies around the world. Tether supports and will assist in identifying and freezing sanctioned addresses engaged in illegal activities or involved in any form of terrorist financing.”

Moreover, Tether stated that its efforts to combat criminal activity go beyond the registration process. The company uses surveillance tools to continuously monitor customer activity, enforce regulations, and identify any potential abuse of its stablecoin.

“Specifically, Tether uses Chainalysis’s Reactor tool and receives secondary market risk reports from the company. These monitoring tools are considered the leading blockchain surveillance options and are used by many US government agencies to monitor blockchain activity”the letter states.

In a letter addressed to lawmakers, Tether CEO #Paolo Ardoino provided a detailed account of the company's recent anti-crime initiatives. He outlined the company's new wallet freeze policy, which helped law enforcement restrict access to more than 200 wallets, freezing more than $3.5 million.

Tether also highlighted its cooperation with the US Department of Justice, the US Secret Service and the FBI, citing real-life examples of assistance to law enforcement agencies. The company said it has helped freeze 326 #wallets to date, valued at more than $435 million.

“This strategic relationship strengthens our commitment to supporting law enforcement in the fight against illegal activity and facilitating the recovery of funds from victims”Tether states.

In light of recent regulatory scrutiny facing cryptocurrency companies around the world, Tether announced on December 9 that it had initiated a voluntary wallet freeze policy. This policy proposes secondary market controls to freeze activities associated with individuals subject to sanctions imposed by the US Office of Foreign Assets Control.

Earlier, in 2022, Tether refrained from actively freezing wallets related to #sanctions. However, the increasing crackdown on cryptocurrency companies in the US and around the world has prompted the stablecoin issuer to reconsider its strategy.

“Tether is committed to becoming a world-class partner for the United States as we continue to assist law enforcement and expand dollar hegemony around the world”said Tether CEO Paolo Ardoino.

According to #CoinMarketCap, the intense focus on crypto firms in the US in 2023 has contributed to USDT's market share, which currently stands at $90 billion. This highlights the growing importance of stablecoins in the cryptocurrency market.

Tether's disclosure of its letters to #US legislators demonstrates the company's commitment to combating illegal use of its stablecoin. By actively engaging with regulators and implementing strict compliance measures, Tether strives to ensure the integrity and security of its cryptocurrency.

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