Tether Steps Up Monitoring to Combat Illicit Finance in Crypto Markets

Tether, the world’s largest stablecoin, is ramping up its monitoring efforts to combat illicit finance in the crypto market. In a statement released on Thursday, Tether announced that it has partnered with blockchain analytics company Chainalysis to track the use of its tokens in broader crypto markets and payments.

This move comes in response to reports that Tether has been used by sanctioned entities to evade sanctions. Last month, Reuters reported that Venezuela’s state-run oil company PDVSA planned to increase its use of Tether in its crude and fuel exports, despite U.S. oil sanctions. Additionally, The Wall Street Journal reported that Russian middlemen used Tether to source weapons parts for drones and other military equipment, bypassing Western sanctions.

Tether’s announcement did not directly address these reports, but a spokesperson for the company stated that the new monitoring tools with Chainalysis have been in development for several months. Tether has emphasized its compliance with OFAC/SDN list sanctions and its commitment to traceability and accountability in all transactions.

With $100 billion in circulation as of March, Tether has seen rapid growth in recent years, driven by its use as an alternative to the dollar in emerging markets. Stablecoins like Tether can be used for payments and trading on crypto exchanges, making them a popular choice for investors.

Tether, registered in Hong Kong and owned by a company in the British Virgin Islands, has the ability to freeze its tokens and has previously cooperated with law enforcement requests. The company’s efforts to enhance monitoring and compliance reflect a broader trend in the crypto industry towards increased regulation and transparency.

Overall, Tether’s proactive approach to combatting illicit finance signals a commitment to maintaining integrity and security in the crypto market.