Tether Onboards 3 Agencies incl. FBI on its Platform to Prevent Illegal use of USDT

Key Insights:

• Tether confirms it onboarded DoJ, FBI, Secret Service to prevent illegal use of USDT.
• Active collaborations with Israel too.
• Enforces US Sanctions regarding international use of USDT.

Tether, the largest issuer of stablecoins has written a letter to the Department of Justice sharing that it has onboarded FBI and the US Secret Service on its platform to prevent criminals from using its stablecoin USDT.

The company has been working with several law enforcement agencies and has acted on their request.

On Dec 17, 2023, it has frozen $435 million USDT along with 326 wallets on instruction by US authorities.

It has also been actively working with other law enforcement agencies internationally to prevent money laundering, prevent USDT use in trafficking and terror financing.

The Letter of Big Revelations

In a letter addressed to Senator Cynthia Lummis and Congressman J. French Hill Tether responded to to their concerns on money laundering and terror financing via cryptocurrencies.

Tether had also written an earlier letter on November 16, 2023 where it responded to the lawmakers when they raised concerns in a letter to Attorney General Merrick Garland.

The USDT issuer also revealed in the letter that its was actively also collaborating with the Office of Foreign Assets Control (OFAC) and has taken actions on its Specially Designated Nationals(SDN) list.

#NOTE: The OFAC is an US govt authority that enforces sanctions on countries designated by the US government.

The key points which were mentioned in the letter were:

• New wallet freezing policy which was on the lines of PayPal's PYUSD.
• It will freeze all the wallets which belong to the SDN list.
• Tether has partnered with Deparment of Justice, US Secret Service and the Federal Bureau of Investigation.
• The collaboration will prevent illicit money transfers and also help in fund recovery.
• Tether aspires to set net industry standards through its commitment to security, compliance, law enforcement and by establishing norms for the industry.

Earlier Actions on Money Laundering and Terror Financing by Tether

• On 16 October 2023, Tether confirmed that it has frozen funds in 32 crypto wallets which were linked to "terror in Israel". By then, it was already working with Israel's National Bureau for Counter Terror Financing. As per a report by TRM labs, USDT on the Tron blockchain was a method of choice for money laundering in the region.

• In November 2023, Tether had also frozen $225 million in funds allegedly meant for human trafficking. It used blockchain analysis tool Chainanalysis to detect the accounts.

Full Article: Tether Freezes $225 Million in USDT Linked to Human Trafficking Syndicate

Wins and Misses by Regulatory Authorities

Lately, there has been a big win for regulatory and law enforcement authorities especially in the USA where the Department of Justice has recently settled the case with Binance where the exchange was made to pay $4 billion in fines and its CEO Changpeng Zhao had to step down.

On the other hand the SEC has unable to prevent Ripple from winning against it, neither it could win in the Grayscale Bitcoin ETF case. Further, it has also signaled that a Bitcoin ETF might be expected soon as close as first half of January 2024.

About Tether

Tether is the issuer of the USDT stablecoin, which is a very important asset for traders, investors, for making payments and also for Decentralized Finance.

As of 17 Dec 2023, Tether has a market size of nearly $90 Billion.

The company has become the largest issuer of stablecoins beating USDC's Circle (market cap of $24 billion) by a huge margin. The rise of Tether was led by an incident where Circle's money used as USDC reserves got frozen along with Silicon Valley Bank.

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