Tether, the company behind the USDT stablecoin, has frozen 326 wallets containing $435 million worth of USDT, the company highlighted in a letter on December 15. The assets were frozen to assist law enforcement authorities, including the Federal Bureau of Investigation (FBI), the US Department of Justice (DOJ), and the Secret Service. The letter, written to Congressman Jay French Hill and Senator Cynthia M. Lummis, followed another letter to politicians on November 16.
Both letters were dispatched in response to Lummis and Hill’s letter to Attorney General Merrick Garland on Oct. 26. In that letter, Lummis and Hill expressed their concerns about the use of stablecoins for illicit activities, such as terrorist financing and money laundering. Moreover, they urged the DOJ to scrutinize the extent to which both Tether and Binance may be supporting terrorism. Despite denying these allegations, Tether remains committed to fighting criminal activities.
In recent letters, Tether CEO Paolo Ardoino said the company aims to become a “world-class partner” to the US to “expand dollar hegemony globally.”
Tether’s Commitment To Stop Illicit Use Of USDT
Ardoino said the platform started a “wallet-freezing policy” on Dec. 1 to help law enforcement agencies fight against the illicit use of stablecoins. Describing it as a “historic milestone,” Tether mentioned that their new policy is simple but impactful. It involves freezing all wallets listed on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) list.
“By expanding our sanctions controls to the secondary market, we are setting a precedent in the industry, leading with foresight and vigilance.”
The company added that it recently onboarded the United States Secret Service onto its platform and is currently working to onboard the FBI. In a four-page letter in November, Tether listed all its ongoing efforts to stop the misuse of USDT. This involved implementing a robust Know Your Customer (KYC) and Anti-Money Laundering (AML) program that matches the standards observed in “sophisticated financial institutions,” according to the letter. Tether’s KYC/AML program was tested by the Internal Revenue Service (IRS) on behalf of the Financial Crimes Enforcement Agency (FinCEN).
The company also disclosed the use of a reactor tool from Chainalysis, a crypto market activity analysis firm. This tool helps Tether examine blockchain transactions to identify wallets linked to suspicious activities.