Tether commits to freezing addresses linked to sanctions as scrutiny over USDT misuse grows

Stablecoin issuer Tether said crypto slate The company announced it would freeze all addresses associated with sanctioned companies.

The decision was made in response to reports indicating that some state actors are using Tether’s USDT token to circumvent US sanctions.

A company spokesperson said:

“Tether respects the Office of Foreign Assets Control’s (OFAC) SDN list and will work to ensure that sanctioned addresses are promptly frozen.”

Over the past year, the company has been actively freezing addresses and holding large amounts of digital assets involved in illegal activities. For example, last year the company froze 32 addresses holding $873,118.34 related to illegal activities in Israel and Ukraine.

Tether CEO Paolo Ardoino said these actions reflect the company’s commitment to establishing higher safety standards within the emerging industry.

Tether’s USDT is the largest stablecoin by market capitalization, with approximately $110 billion in circulating supply.

Avoiding restrictions

Despite Tether’s compliance efforts, recent reports indicate that the USDT stablecoin continues to be misused to evade terrorist groups and sanctions.

For example, Reuters report Venezuela’s state-owned oil giant PDVSA has revealed that it was using the USDT stablecoin to export crude oil and fuel amid renewed US sanctions.

U.S. Deputy Treasury Secretary Adewale Adeyemo recently warned Congress that Russia is escalating the introduction of alternative payment methods, such as Tether’s USDT stablecoin, to circumvent economic sanctions.

The UN report highlighted the prevalence of cryptocurrency-based money laundering, primarily through Tether and USDT on the TRON blockchain, with illegal online gambling platforms being major facilitators.

These developments have prompted US Senator Elizabeth Warren to advocate for strong regulatory measures against proposed stablecoin regulations, including anti-money laundering authorities.

According to the lawmaker, exempting stablecoin issuers, along with other DeFi intermediaries, from the AML/CFT requirements of the Stablecoin Act would allow bad actors to benefit from the increased crypto trading activity mandated by the law. That’s what it means.

mentioned in this article

Related Article

0 Comments

Leave a Comment