Crypto Updates

Tether commits to freezing addresses linked to sanctions as scrutiny over USDT misuse grows

Tether commits to freezing addresses linked to sanctions as scrutiny over USDT misuse grows

Stablecoin issuer Tether told CryptoSlate that the firm would freeze any addresses linked to sanctioned entities.

This decision comes in response to reports indicating that some state actors were leveraging Tether’s USDT tokens to circumvent US sanctions.

A spokesperson for the firm said:

“Tether respects the Office of Foreign Assets Control (OFAC) SDN list and is committed to working to ensure sanction addresses are frozen promptly.”

Over the past year, the company has proactively frozen addresses, holding significant amounts of its digital assets involved in unlawful activities. For example, the firm froze 32 addresses holding $873,118.34 connected to illicit activities in Israel and Ukraine last year.

Tether’s CEO Paolo Ardoino said these actions reflect the firm’s commitment to establishing higher safety standards within the emerging industry.

Tether’s USDT is the largest stablecoin by market capitalization, with approximately $110 billion circulating supply.

Bypassing restrictions

Despite Tether’s compliance endeavors, recent reports indicate persistent exploitation of the USDT stablecoin by terrorist groups and sanctioned nations to evade restrictions.

For instance, Reuters reported that Venezuela’s state-owned oil giant, PDVSA, was leveraging the USDT stablecoin for crude oil and fuel exports amid renewed US sanctions.

US Treasury Deputy Secretary Adewale Adeyemo recently alerted Congress to Russia’s escalating adoption of alternative payment avenues, such as Tether’s USDT stablecoin, to evade economic sanctions.

A United Nations report highlighted the prevalence of cryptocurrency-based money laundering, mainly through Tether or USDT on the TRON blockchain — with illegal online gambling platforms as prime facilitators.

These developments prompted US Senator Elizabeth Warren to advocate for robust regulatory measures encompassing anti-money laundering authorities for any proposed stablecoin regulations.

According to the lawmaker, excluding stablecoin issuers, alongside other DeFi intermediaries, from any stablecoin legislation’s AML/CFT requirements would allow bad actors to profit from the increase in crypto trading activities that the law would provide.

Mentioned in this article

Click Here to Read the Full Original Article at Stablecoins News | CryptoSlate…