Tether, the company responsible for the stablecoin Tether, has publicly revealed letters it sent to United States lawmakers addressing their concerns regarding the Department of Justice’s (DOJ) inquiries into the potential illicit use of its stablecoin.
These communications were dispatched to members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs as well as the U.S. House Financial Services Committee on two separate occasions, November 16 and December 15.
In these letters, Tether emphasized its strong commitment to combatting the illicit utilization of stablecoins.
The primary objective of these letters was to respond to calls from Senator Cynthia Lummis and Representative French Hill made in October.
These lawmakers had urged the DOJ to thoroughly assess the extent to which both Binance and Tether might be providing substantial support and resources for terrorism.
These calls came after Hamas executed a coordinated attack against Israel on October 7, with the implication that some of the funding for these illicit activities was facilitated through cryptocurrency transactions.
In response, Tether outlined its existing measures to prevent illicit activities, including a Know Your Customer (KYC) program, transaction monitoring systems, and a proactive approach to identifying suspicious accounts and activities.
The company expressed its willingness to cooperate with law enforcement agencies globally, including the identification and freezing of addresses related to sanctions, illicit activities, or terrorist financing.
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Tether also noted that its client reviews continue beyond the onboarding process, with the use of surveillance monitoring tools to continuously track client activity.
They specifically mentioned the use of the Reactor tool from Chainalysis, a leading blockchain surveillance tool employed by various U.S. government agencies.
Furthermore, Tether disclosed its collaboration with the Federal Bureau of Investigation (FBI) as part of its efforts to assist law enforcement in combating illicit activities and aiding victims in recovering their funds.
In a related development, Tether announced a voluntary wallet-freezing policy on December 9.
This initiative provides secondary market controls to freeze any activity associated with sanctioned individuals listed by the United States Office of Foreign Assets Control Specially Designated Nationals List.
Previously, in 2022, Tether had resisted proactively freezing wallets linked to suspicious activities.
However, increased regulatory scrutiny of cryptocurrency firms in the U.S. and worldwide prompted the company to reconsider its stance.
Tether’s CEO, Paolo Ardoino, stated, “Tether seeks to be a world-class partner to the U.S. as we continue to assist law enforcement and expand dollar hegemony globally.”
This increased scrutiny in 2023 has favored the market share of USDT, which currently stands at $90 billion according to CoinMarketCap.
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