Coinspeaker
Tether Steps Up Monitoring of Token Usage to Combat Illicit Finance
The crypto landscape undergoes continuous evolution, with regulatory concerns becoming an increasingly influential factor shaping its growth. Tether, the world’s largest stablecoin pegged to the US dollar, leads in implementing stricter monitoring tools to combat illegal financial activities.
Tether recently disclosed its partnership with Chainalysis, a blockchain analytics company. The strategic move comes amid increasing scrutiny of Tether’s role in enabling cross-border transactions, particularly in nations under sanctions. Recent reports indicate that Venezuelan oil corporation PDVSA aimed to utilize Tether for oil exports despite US sanctions.
Tether Enhances Compliance Measures with Chainalysis Ecosystem Monitoring Solution. Tether has collaborated with @chainalysis, the blockchain data platform to develop a customizable solution for monitoring secondary market activity.
— Tether (@Tether_to) May 2, 2024
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Additionally, The Wall Street Journal revealed Russian exploitation of Tether to evade sanctions and procure military hardware. Although Tether has asserted that all transactions are traceable and can be frozen upon legal requests, these reports show the potential for misuse within the cryptocurrency ecosystem.
Tether’s $100 Billion Transparency Move
This collaboration with Chainalysis provides Tether with advanced tools to detect transactions involving sanctioned entities and track the activities of major token holders. This increased transparency aims to deter illegal activities and reinforce Tether’s standing as a legitimate financial instrument.
“Our collaboration with Chainalysis marks a pivotal step in our ongoing commitment to establishing transparency and security within the cryptocurrency industry,” said Tether CEO Paolo Ardoino.
Tether’s popularity has surged recently, reaching $100 billion in circulation in March. As stated by Paolo Ardoino last month, the rise is driven by its usage as a substitute for the dollar, especially in developing nations.
Unlike highly volatile cryptocurrencies like Bitcoin, Tether stability makes it ideal for fiat conversions with minimized exchange risks. However, questions persist about Tether’s reserves backing tokens; stricter monitoring could address concerns and curb illicit activities.
UN Criticizes Tether’s Role in Crime
A recent United Nations report highlighted the role of crypto in financing organized crime across East and Southeast Asia. Specifically, it highlighted Tether’s USDT as a prominent facilitator. However, Tether defended itself, emphasizing the traceability of USDT transactions, suggesting the report overlooked this crucial aspect.
With a market capitalization exceeding $100 billion, Tether’s USDT significantly outperforms its closest rival, USD Coin, which has a market cap of around $33.billion. However, critics argue that Tether lacks sufficient transparency about its financial operations.
Tether Steps Up Monitoring of Token Usage to Combat Illicit Finance
