Chainalysis Develops Tool for Tether to Monitor Stablecoin's Secondary Market Amid Criticism
Summary:
Blockchain analytics firm Chainalysis has created a solution enabling stablecoin issuer Tether to monitor its secondary market. The features of the solution, including sanctions monitoring and illicit transfer detection, will provide Tether with market insights and aid in identifying wallets potentially linked to illicit activities. Despite facing criticism for alleged ties to criminal and terrorism financing, along with transparency issues, Tether continues to lead the stablecoin market with a capitalization of $109.8 billion.
Blockchain analytic firm, Chainalysis, has developed a solution that enables Tether, the stablecoin issuer, to oversee the secondary market operations of its digital currency. The new tools will yield valuable market insights and facilitate the identification of wallets that could be related to illicit transactions or sanctioned addresses.
The solution comprises various features, as unveiled by Tether's official announcement. These include Sanctions Monitoring, a tool to track transactions and addresses related to sanctioned entities; an Illicit Transfer Detector, designed to identify transactions potentially linked to terror funding; a Categorization function, which classifies Tether (USDT) owners based on categories such as exchanges or darknet markets; and Largest Wallet Analysis, a tool that focuses on substantial USDT holders and their activities.
Tether's CEO, Paolo Ardoino, expressed that partnering with Chainalysis is a key move in their ongoing efforts to bolster transparency and security in the crypto sector. Despite Tether's collaboration with 43 jurisdictions to combat illicit activities, the company has faced criticism for the alleged involvement of its stablecoin in criminal operations and terrorism financing.
In the wake of the Hamas attacks on Israel last October, pro-crypto U.S. Senator Cynthia Lummis called for an inquiry into the roles of Tether and Binance, accusing Tether of facilitating violations of sanctions laws. In response to a report from the United Nations Office on Drugs and Crime criticizing the role of cryptocurrencies in criminal funding in East and Southeast Asia, particularly singling out USDT, Tether defended the traceability of its stablecoin.
Further critiques centered on the company’s transparency regarding finances, as Tether's USDT boasts a market cap of $109.8 billion, significantly surpassing its closest competitor, USD Coin (USDC), with a market cap of $33.9 billion.
Published At
5/2/2024 11:48:34 PM
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