This collaboration with Chainalysis provides Tether with advanced tools to detect transactions involving sanctioned entities and track the activities of major token holders.
By Bena Ilyas
Edited by Julia Sakovich
Updated
2 mins read
The crypto landscape undergoes continuous evolution, with regulatory concerns becoming an increasingly influential factor shaping its growth. Tether, the world’s largest stablecoin pegged to the US dollar, leads in implementing stricter monitoring tools to combat illegal financial activities.
Tether recently disclosed its partnership with Chainalysis, a blockchain analytics company. The strategic move comes amid increasing scrutiny of Tether’s role in enabling cross-border transactions, particularly in nations under sanctions. Recent reports indicate that Venezuelan oil corporation PDVSA aimed to utilize Tether for oil exports despite US sanctions.
Tether Enhances Compliance Measures with Chainalysis Ecosystem Monitoring Solution. Tether has collaborated with @chainalysis, the blockchain data platform to develop a customizable solution for monitoring secondary market activity.
— Tether (@Tether_to) May 2, 2024
Read Morehttps://t.co/8r5NwJmL5q
Additionally, The Wall Street Journal revealed Russian exploitation of Tether to evade sanctions and procure military hardware. Although Tether has asserted that all transactions are traceable and can be frozen upon legal requests, these reports show the potential for misuse within the cryptocurrency ecosystem.
This collaboration with Chainalysis provides Tether with advanced tools to detect transactions involving sanctioned entities and track the activities of major token holders. This increased transparency aims to deter illegal activities and reinforce Tether’s standing as a legitimate financial instrument.
“Our collaboration with Chainalysis marks a pivotal step in our ongoing commitment to establishing transparency and security within the cryptocurrency industry,” said Tether CEO Paolo Ardoino.
Tether’s popularity has surged recently, reaching $100 billion in circulation in March. As stated by Paolo Ardoino last month, the rise is driven by its usage as a substitute for the dollar, especially in developing nations.
Unlike highly volatile cryptocurrencies like Bitcoin, Tether stability makes it ideal for fiat conversions with minimized exchange risks. However, questions persist about Tether’s reserves backing tokens; stricter monitoring could address concerns and curb illicit activities.
A recent United Nations report highlighted the role of crypto in financing organized crime across East and Southeast Asia. Specifically, it highlighted Tether’s USDT as a prominent facilitator. However, Tether defended itself, emphasizing the traceability of USDT transactions, suggesting the report overlooked this crucial aspect.
With a market capitalization exceeding $100 billion, Tether’s USDT significantly outperforms its closest rival, USD Coin, which has a market cap of around $33.billion. However, critics argue that Tether lacks sufficient transparency about its financial operations.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
