Tether Unveils Proactive Measures to Align with U.S. Regulators: Implements Voluntary Wallet-Freezing Policy in Collaboration with OFAC
In a bid to foster cooperation with regulatory bodies and law enforcement agencies in the United States, Tether, the stablecoin issuer, has recently taken a significant step by introducing a voluntary wallet-freezing policy, as disclosed in a blog post on December 9th.
Starting from December 1st, Tether is extending its control sanctions to the secondary market, specifically targeting individuals listed under the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List. This list encompasses companies and individuals associated with sanctioned countries.
Tether emphasizes that this policy is an additional layer to its existing security protocols, representing a proactive initiative to enhance collaboration with global regulators and law enforcement agencies.
The U.S. Department of the Treasury has actively utilized the OFAC SDN List to monitor and restrict crypto transactions potentially linked to illicit activities, including terrorism funding and unauthorized distribution of substances like fentanyl.
Tether has already taken action by freezing wallets previously added to the SDN List, a move that marks a departure from its earlier stance. In August 2022, the company declared it would not preemptively freeze sanctioned Tornado Cash addresses unless instructed by law enforcement. Notably, the OFAC revealed that Tornado Cash has been exploited by individuals and criminal organizations to launder over $7 billion in cryptocurrency since 2019.
Paolo Ardoino, CEO of Tether, remarked, “By voluntarily freezing new addresses added to the SDN List and those previously added, we aim to reinforce the positive application of stablecoin technology, fostering a safer ecosystem for all stablecoin users.”
Headquartered in Hong Kong, Tether is the driving force behind the USDT stablecoin, which has witnessed a surge in market capitalization amid the recent crackdown on cryptocurrency firms in the U.S. The current market capitalization stands at $90 billion, underscoring the robust demand for the stablecoin, commanding nearly 70% of the market.