Stablecoin issuer Tether has announced another step toward cooperation with law enforcement and regulatory agencies by initiating a voluntary wallet-freezing policy.
According to a Tether blog post from Dec. 9, the policy will supplement existing security protocols and is a “proactive effort to work even more closely with global regulators and law enforcement agencies.”
Since Dec. 1, Tether has offered secondary market controls to freeze activity connected with sanctioned persons on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List. Companies and individuals controlled or owned by sanctioned countries are included on the list.
Tether Introduces New Policy to Strengthen Ecosystem Security
— Tether (@Tether_to) December 9, 2023
Read more ⬇️https://t.co/kCCFhLflfb
The U.S. Department of the Treasury has been using the list to curb crypto transactions potentially connected to illegal activities, including funding terrorism and unauthorized fentanyl distribution.
Tether has already frozen wallets previously added to the SDN List in a move that contradicts the company’s previous positions on the matter. In August 2022, for example, Tether announced it wouldn’t proactively freeze sanctioned Tornado Cash addresses unless instructed by law enforcement. According to the OFAC, individuals and criminal organizations have used Tornado Cash to launder over $7 billion in cryptocurrency since 2019.
“By executing voluntary wallet address freezing of new additions to the SDN List and freezing previously added addresses, we will be able to further strengthen the positive usage of stablecoin technology and promote a safer stablecoin ecosystem for all users,” said Paolo Ardoino, CEO of Tether.
The company based in Hong Kong is behind the stablecoin Tether (USDT), whose market capitalization reached all-time highs during the crackdown on crypto firms in the U.S. over the past months. Its market capitalization is at $90 billion today, indicating a strong demand for the stablecoin that holds nearly 70% of the market.
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