Tether Steps Up for U.S. Law Enforcement, Freezing Over $400 Million in Assets

Tether, the largest issuer of stablecoins, has taken a significant step in cooperating with U.S. law enforcement agencies by freezing 326 wallets containing $435 million worth of Tether (USDT).

This action, detailed in a letter from the company on December 15, was undertaken to assist authorities including the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Secret Service in their investigative and regulatory efforts.

Tether Assists U.S. Law Enforcement by Freezing Assets

Tether has just announced the freezing of 326 wallets, which collectively contain $435 million in Tether (USDT). This action, revealed in a letter dated December 15, was taken to support law enforcement agencies, including the U.S. Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the Secret Service.

The correspondence, directed to Senator Cynthia M. Lummis and Congressman J. French Hill, was a follow-up to a previous letter sent on November 16. Both these communications were in reply to a letter from Lummis and Hill to Attorney General Merrick Garland dated October 26. This initial letter raised concerns regarding the potential use of stablecoins in illicit activities, such as money laundering and financing of terrorism.

By making both letters public, Tether’s CEO Paolo Ardoino emphasized the company’s commitment to becoming a leading global partner to the United States. Ardoino’s statement underlined Tether’s goal to aid in the expansion of the global influence of the U.S. dollar.

Tether Enhances Measures Against Illicit USDT Use

Tether has stated its dedication to preventing the illicit use of its stablecoin, USDT, in a recent letter. The company announced the implementation of a “wallet-freezing policy” effective December 1. This move is aimed at bolstering law enforcement efforts in tackling the unlawful use of stablecoins. 

Tether described this initiative as a “historic milestone,” noting that this simple yet significant policy entails freezing all wallets that are identified on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list.

Tether’s recent statement emphasized the significant implications of its new policy, noting that extending its sanctions controls to the secondary market represents a pioneering move in the industry, characterized by proactive and careful monitoring. 

The company also disclosed that it has recently included the Secret Service on its platform and is currently working towards integrating the FBI. Additionally, Tether has been actively cooperating with the DOJ, playing a crucial role in hindering the operations of nefarious entities and supporting recovery processes for those affected by such criminal activities.

Tether’s Rigorous Efforts to Ensure USDT Compliance

In a comprehensive 4-page letter released in November, Tether outlined its extensive efforts to curb the use of its USDT stablecoin for illicit activities. The company highlighted its robust know-your-customer (KYC) and anti-money laundering (AML) program, which, according to the letter, matches the standards of sophisticated financial institutions.

Tether’s KYC/AML procedures have been thoroughly vetted, having undergone a Title 31 examination by the Internal Revenue Service (IRS) acting on behalf of the Financial Crimes Enforcement Network (FinCEN). As a registered Money Service Business with FinCEN, Tether upholds strict compliance standards.

Further demonstrating its commitment to due diligence, Tether works with third-party services such as Chainalysis and WorldCheck. These services assist in conducting in-depth background checks on prospective customers and provide ongoing monitoring of existing clients to ensure their information remains current.

Highlighting the nature of its clientele, Tether stated that its customer base primarily consists of accredited individuals, trading firms, and institutions. Given its relatively small customer base, especially when compared to the millions handled by some crypto exchanges, Tether is able to conduct more thorough due diligence on all its clients, thereby enhancing the integrity and safety of transactions involving USDT.

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