Tether, the stablecoin issuer, has partnered with blockchain analysis firm Chainalysis to develop a solution that allows Tether to monitor the secondary market for its stablecoin. This new solution will provide Tether with valuable market insights and the ability to identify wallets that may be linked to illicit or sanctioned addresses.
Tether has announced four tools that will be included in the solution. The first tool, Sanctions Monitoring, will provide a list of addresses and transactions involving sanctioned entities. The second tool, Illicit Transfer Detector, will identify transactions that potentially involve activities such as terrorism financing. The third tool, Categorization, will classify Tether holders based on their type, such as exchange or darknet market participants. Lastly, the Largest Wallet Analysis tool will focus on significant USDT holders and their activities.
Paolo Ardoino, CEO of Tether, emphasized the company’s collaboration with authorities in 43 jurisdictions to combat illicit activities. However, Tether has faced criticism regarding the stablecoin’s alleged involvement in criminal activities and terrorism financing.
This criticism even prompted United States Senator Cynthia Lummis to send a letter to Attorney General Merrick Garland, urging an investigation into Tether and Binance’s role in the Hamas attacks on Israel. Senator Lummis and Representative French Hill alleged that Tether knowingly facilitated violations of applicable sanctions laws.
A report from the United Nations Office on Drugs and Crime released in January heavily criticized the role of cryptocurrencies in financing organized crime in East and Southeast Asia, specifically highlighting USDT. Tether responded by stating that the report disregarded the traceability of USDT.
In addition to concerns about illicit activities, Tether has faced scrutiny for its lack of financial transparency. With a market cap of $109.8 billion, Tether significantly surpasses its closest competitor, USD Coin, which has a market cap of $33.9 billion.
The collapse of Mt. Gox, one of the largest Bitcoin exchanges, played a significant role in the development of Chainalysis and the emergence of blockchain analysis as a tool to investigate financial crimes in the crypto space.
[Image: Tether logo]
Source: Tether
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