Tether, the corporation behind the Tether stablecoin, published letters to US politicians addressing calls for involvement by the Department of Justice (DOJ) with respect to the criminal usage of its stablecoin.
On November 16 and December 15, letters were made to United States Senate Committee on Banking, Housing, and Urban Affairs members and the United States House Financial Services Committee, highlighting “Tether’s commitment to fighting illicit use of stablecoins.”
Tether wants to partner with the US government
The letters are intended to respond to Senator Cynthia Lummis and Representative French Hill’s October request that the DOJ “carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism.”
The lawmakers made the comments after Hamas launched a planned strike on Israel on Oct. 7, which they claimed was aided in part by illicit crypto transactions “providing significant terrorism financing.”
The crypto entity indicated that it had a Know Your Customer (KYC) program, a transaction monitoring system, and a “proactive approach” to spotting suspect accounts and actions as part of its reaction.
The stablecoin issuer first highlighted its KYC and AML policies, which included:
The IRS has conducted a Title 31 examination of our KYC program on behalf of FinCEN. Tether has also retained a prominent Washington DC law firm to conduct an Independent Review of our KYC/AML, BSA, and On-Boarding program to ensure they are of the highest standards.Tether
The company stated that it is “fully committed to the fight against terrorist financing, compliance with the Bank Secrecy Act and U.S. Sanctions Laws, and meeting the highest levels of customer due diligence and rigorous transaction screening.”
Tether and crypto regulation and compliance
Paolo Ardoino, the newly appointed CEO, stated that his company is glad for the opportunity to discuss these problems with the US government. He says the crypto entity aspires to be a “world-class partner” of US authorities as they “continue to assist law enforcement and expand dollar hegemony globally.”
Tether is the most popular stablecoin. Its market dominance is growing, as its market valuation recently surpassed $90 billion.
We have always assisted law enforcement when called upon to act, and we remain fully committed to continuing to work proactively with agencies globally. Tether has and will assist in identifying and freezing addresses subject to sanctions, engaged in illicit activity, or engaged in any form of terrorist financing.Open Letter
Furthermore, Tether stated that customer reviews do not end with onboarding, claiming to continuously deploy surveillance monitoring techniques to follow client activity. In particular, Tether uses Chainalysis’s reactor tool and receives secondary market risk reports from this company.
These surveillance tools are regarded as the best solutions for blockchain surveillance and are used by several US government agencies to monitor blockchain activity.
Tether announced on December 9 that it had begun a voluntary wallet-freezing policy, offering secondary market controls to freeze activity associated with sanctioned persons on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
Tether previously refused to freeze wallets related to illegal activity in 2022. However, the company’s approach was forced to change due to the strong crackdown on crypto businesses in the United States and worldwide.
The investigation of crypto businesses in the United States through 2023 favored USDT’s market share, which stands at $90 billion at the time of writing, according to CoinMarketCap.