Tether and Chainalysis Join Forces to Enhance Oversight of USDT Transactions
Tether, the stablecoin issuer, has announced a collaboration with blockchain data platform Chainalysis. This partnership aims to improve the supervision of Tether token transactions, with a specific focus on identifying and mitigating risks associated with illicit activities and breaches of sanctions.
The decision to collaborate comes as regulators worldwide increase pressure on Tether, pushing the company to enhance its compliance procedures. In response to the growing regulatory scrutiny across various countries, Tether has been actively working towards strengthening its transaction monitoring systems.
Chainalysis has developed a cutting-edge technology that Tether can utilize to monitor USDT trades on secondary marketplaces and assess their legitimacy. The ultimate objective of this joint effort is to pinpoint suspicious wallets and transactions that may be linked to the sanctions list, money laundering, or terrorist financing. By leveraging existing tools for managing sanctions and detecting illegal transfers, Tether aims to ensure the integrity of its platform.
The need for tighter oversight arises from concerns that USDT has the potential to evade global sanctions and facilitate illegal financial activities. For instance, there have been allegations that Venezuela’s state-owned oil business has used USDT to bypass US sanctions. Additionally, a United Nations study conducted earlier this year revealed that USDT is commonly employed for underground banking and money laundering in Southeast Asia and East Asia.
To address these concerns, Tether has taken the initiative to enhance its compliance structure. Recognizing that any platform under its control could be exploited for illicit purposes, Tether has chosen to implement Chainalysis’s technology as a safeguard. By doing so, Tether is aligning itself with the wider industry efforts to safeguard the crypto ecosystem.
In other crypto news, the Total Value Locked (TVL) of the Telegram-linked TON Ecosystem has experienced a remarkable surge of 1182% in the first quarter of 2024.