Tether increases surveillance of USDT transactions on secondary markets

abdelaziz Fathi

Tether, the issuer of the USDT stablecoin, has inked a partnership with blockchain surveillance company Chainalysis to monitor its token transactions on secondary markets.


The alliance is said to improve international sanctions compliance and detect illicit transfers linked to activities like terrorist financing. According to Tether’s statement, Chainalysis solutions will enable the identification of crypto wallets that may pose risks or are associated with illicit and/or sanctioned addresses.

Tether’s CEO Paolo Ardoino comments: “Our collaboration with Chainalysis marks a pivotal step in our ongoing commitment to establishing transparency and security within the cryptocurrency industry.”

This initiative arrives as Tether faces increased scrutiny from global regulators and policymakers over its USDT and its alleged role in bypassing international sanctions and illicit finance. A report from the United Nations earlier this year criticized the role of cryptocurrencies, particularly USDT, in underground banking and money laundering activities in East Asia and Southeast Asia.

Tether has been criticized for its alleged involvement in criminal activities and terrorism financing, leading to calls for investigations by U.S. lawmakers like Senator Cynthia Lummis and Representative French Hill. They have raised concerns about Tether’s compliance with applicable sanctions laws, specifically relating to the Hamas attacks on Israel in October.

U.S. and UK authorities are also investigating the movement of $20 billion in the USD-pegged stablecoin tether through Moscow-based exchange Garantex. The Russian platform was sanctioned for its role in money laundering, terrorism financing, and facilitating ransomware attacks.

Despite Tether’s operations being outside the U.S., American regulators, through the Office of Foreign Assets Control (OFAC), has mechanisms to influence the stablecoin’s offshore activities.

Chainalysis will offer several tools to Tether, including Sanctions Monitoring, Illicit Transfer Detector, Categorization, and Largest Wallet Analysis. These tools provide insights into USDT transactions and identify holders potentially involved in illicit activities.

Tether, which has a market cap of $109.8 billion, remains the leading stablecoin, far ahead of its closest competitor, USD Coin, which has a market cap of $33.9 billion.

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