USDT issuer partners with monitoring company to prevent illegal activities involving USDT
Tether, the issuer of the largest stablecoin in the world, USDT, announced last Thursday (5/2) evening in the US (Friday in Taiwan time) that it will collaborate with blockchain data analytics and monitoring company Chainalysis to track the trading activities of USDT in the secondary market.
In the context of this collaboration, the secondary market refers to the use of USDT for buying and selling within a broader ecosystem, but the transactions are not directly related to Tether, the issuer of USDT.
In the monitoring solution tailored for Tether by Chainalysis, there are four main components:
1. Sanctions Monitoring: Provides a detailed list of wallet addresses and transaction behaviors associated with entities subject to international sanctions.
2. Categorization: Enables thorough categorization of USDT holders, including exchanges and the dark web.
3. Wallet Analysis: Chainalysis has developed the most comprehensive wallet analysis system currently available in the market, which will be used to conduct in-depth research on key USDT holders and their activities.
4. Illicit Transfers Detector: Used to identify transactions related to illegal activities such as terrorist financing.
Tether believes that Chainalysis’ solution will help them conduct transaction monitoring in a more systematic manner, enhance their understanding and supervision of the USDT market, and serve as an active source of intelligence for Tether’s compliance officers and investigators to identify encrypted wallets that carry risks or are associated with illegal and sanctioned addresses.
Paolo Ardoino, the CEO of Tether, stated in a press release, “This collaboration with Chainalysis establishes a crucial step in our commitment to enhancing transparency and security in the cryptocurrency industry. We will continue to uphold our integrity standards and strengthen our proactive actions against criminal activities.”
Jonathan Levin, co-founder and Chief Strategy Officer of Chainalysis, also expressed his opinion, stating that the collaboration between the two parties will make the Tether ecosystem a safer trading environment.
Cryptocurrency transactions are publicly transparent, and working together with law enforcement agencies and freezing accounts in real-time is the most effective way to prevent criminal funds from being used for terrorism, fraud, and other illegal activities.
USDT currently has a circulating market value of over $110 billion, far surpassing its closest competitor USDC ($33.9 billion in market value), solidifying its position as the largest stablecoin in the world. In its first-quarter earnings report last week, Tether reported a strong performance with a profit of $4.52 billion.
However, USDT has been criticized for its association with criminal activities, with even criminal organizations showing a particular affinity for it.
In January of this year, the United Nations Office on Drugs and Crime released a report stating that USDT has become the primary payment tool for money laundering and fraudulent activities in East Asia and Southeast Asia. Additionally, the Venezuelan state-owned oil company, which is under US sanctions, has been found to be using USDT to evade the sanctions.
In October of last year, The Wall Street Journal reported that the Palestinian extremist group Hamas raised nearly $41 million in funds using cryptocurrencies, including USDT.
The association with illegal activities has subjected USDT and its issuer, Tether, to constant criticism. Even Cynthia Lummis, a Republican Senator who supports cryptocurrencies, wrote to the Attorney General in October, urging an investigation into Tether and accusing it of lacking financial transparency and assisting users in circumventing sanctions, allowing sanctioned entities to conduct transactions through USDT.
Under increasing pressure from global regulatory agencies and policymakers, Tether has had to take action to address these accusations.
In addition to launching the monitoring system in collaboration with Chainalysis, Tether is currently cooperating with 43 jurisdictions and 124 law enforcement agencies worldwide to combat ongoing illegal activities.
Source:
Coindesk
Cointelegraph
Tether