Tether Adopts Voluntary Wallet-Freezing Policy Amid Rising Regulatory Scrutiny
Summary:
Tether, a leading stablecoin issuer, has unveiled a voluntary policy to freeze wallet activities linked to individuals and entities sanctioned by the United States Office of Foreign Assets Control (OFAC). This move, signaling collaboration with regulatory bodies and law enforcement agencies, is a deviation from the company's previous stance. The Hong Kong-based company behind Tether (USDT) has seen record highs in market capitalization, currently at $90 billion, amidst the increased regulatory scrutiny of crypto firms in the US.
Tether, a prominent stablecoin issuer, has revealed a new measure to further collaborate with legal authorities and regulatory bodies by launching a voluntary policy to halt wallet activities. This information was made available through a blog post dated December 9. Starting from December 1, Tether has implemented control measures on the secondary market to cease operations linked to individuals and entities sanctioned by the United States Office of Foreign Assets Control (OFAC) as Specially Designated Nationals (SDN). The SDN List includes firms and people that are owned or governed by countries under sanctions. Tether suggests this policy complements existing security protocols and displays a concerted drive to deepen ties with global regulatory bodies and law enforcement agencies.
The US Treasury Department utilizes the SDN List to limit potential crypto transactions related to unlawful acts such as financing terrorism or unauthorized distribution of fentanyl. Tether has already imposed a freeze on wallets previously mentioned on the SDN List, signaling a shift from the company's prior stance. For instance, in August 2022, Tether asserted that it wouldn't proactively halt sanctioned Tornado Cash wallet activities unless law enforcement ordered it. The OFAC points out that individuals and criminal groups have employed Tornado Cash to cleanse over $7 billion worth of cryptocurrency since 2019.
Tether's CEO, Paolo Ardoino, stated, "With the voluntary freeze on the wallet addresses of new entrants on the SDN List, and the cessation of operations of those previously added, we can enhance the beneficial use of stablecoin technology and foster a secure environment for all users." Tether, a Hong Kong-based company, is the creator of the stablecoin Tether (USDT), which has reached record market capitalization amid regulatory scrutiny of cryptocurrency firms in the US in recent months. As it stands presently, Tether's market capitalization stands at $90 billion, suggesting a high demand for the stablecoin with almost 70% market dominance.
Published At
12/9/2023 9:07:16 PM
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