Tether is widening control penalties to the secondary markets with efforts to collaborate with US regulators.
A December 9 blog post showed that Tether, a stablecoin issuer, has revealed another step towards collaboration with regulatory as well as law enforcement agencies by starting an open wallet-freezing scheme.
Tether Unveils Secondary Market Controls to Targeting Sanctioned Individuals
Since December 1, it has been offering secondary market controls to halt activity linked to sanctioned people on the US Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list. Firms and persons managed or owned by sanctioned nations are part of the list.
Tether claims that the policy will augment current security rules and is a ‘proactive strategy of collaborating with law enforcement agencies and international regulators. The United States Department of the Treasury has been utilizing the list to suppress crypto transactions. This includes financing terrorism as well as the unapproved distribution of fentanyl.
Tether Changes Tune to Freeze Wallets Sanctioned by OFAC
Tether has already frozen wallets previously included in the Specially Designated Nationals List. This move goes against the firm’s earlier stances regarding the issue. For instance, in August last year, Tether revealed it would not block sanctioned Tornado Cash addresses except when asked by law enforcement.
The Office of Foreign Assets Control claimed that since 2019, Tornado Cash has been utilized by criminal groups and individuals to launder cryptocurrency worth more than $7B.
Tether Integrates Voluntary Wallet Address Freezing to Strengthen Stablecoin Technology
Paolo Ardoino, Tether’s chief executive officer, said that by implementing voluntary wallet address freezing of new inclusions to the Specially Designated Nationals List and freezing addresses included earlier, they would strengthen the stablecoin technology’s positive utilization and ensure a safer stablecoin system.
The Hong Kong-founded firm is behind Tether. Over the past months, the clampdown on US crypto companies resulted in its market cap attaining all-time highs. Presently, its market cap is $90B, demonstrating a robust demand for the stablecoin, whose market share is approximately 70%.
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