#Tether has responded to American lawmakers' requests for the Department of Justice (DOJ) to act regarding the illegal use of its stablecoin, stating that it aims to be a "world-class partner for the USA."
Communication with Senate and House Committees
Tether has released letters addressed to members of the US Senate Committee on Banking, Housing, and Urban Affairs, and the House Financial Services Committee. Sent on November 16 and December 15, these letters emphasize "Tether's commitment to combating the unlawful use of stablecoins."
Response to Senator Lummis and Representative Hill's Calls
These letters were in response to an October request by Senator Cynthia Lummis and Representative French Hill for the DOJ to thoroughly investigate how Binance and Tether "provide material support and resources for terrorism."
Background of Lawmakers' Request
This request from lawmakers followed a coordinated attack by Hamas against Israel on October 7, which was believed to be partially funded by illegal crypto transactions "providing significant financing for terrorism."
Tether's Measures Against Illegal Use
In its response, Tether stated that it has a Know Your Customer (KYC) system, a transaction monitoring system, and a "proactive approach" to identifying suspicious accounts and activities. "We have always assisted law enforcement agencies when called upon to act and are fully committed to continuing proactive cooperation with agencies worldwide. Tether has and will assist in identifying and freezing addresses subject to sanctions involved in illegal activities or any form of terrorism financing."
Tether's Client Activity Monitoring
Tether also emphasized that client reviews do not end with their onboarding, stating that they use tools like Chainalysis Reactor for ongoing monitoring of client activities. "These monitoring tools are considered primary options for blockchain monitoring and are used by many US government agencies."
Tether's Voluntary Wallet Freezing Policy
On December 9, Tether announced the implementation of a voluntary wallet freezing policy, enabling secondary market checks to freeze activities associated with sanctioned individuals on the US Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list.
Tether's Strategy Shift in Response to Regulatory Pressure
In 2022, Tether initially refused to proactively freeze wallets associated with irregular activities. However, intense regulation of crypto firms in the USA and globally led the company to reconsider its strategy. "Tether strives to be a world-class partner for the USA as we continue to assist in law enforcement and expand dollar hegemony globally," stated Tether CEO Paolo Ardoino.
Impact on Tether's Market Share in the USA
The scrutiny of crypto firms in the USA in 2023 has bolstered the market share of USDT, which stands at 90 billion USD according to CoinMarketCap.
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