Tether Implements USDT Surveillance in Partnership with Chainalysis

Tether partners with Chainalysis to implement a comprehensive surveillance system that monitors USDT transactions on secondary markets to improve security and compliance.

Strengthening Surveillance

Tether, the issuer of the largest stablecoin USDT, has announced a collaboration with blockchain surveillance company Chainalysis to monitor transactions involving its tokens on secondary markets. This initiative aims to develop a customizable solution to monitor secondary market activity.

According to Tether CEO Paolo Ardoino, the collaboration with Chainalysis is a pivotal step in Tether’s commitment to establishing transparency and security within the cryptocurrency industry.

Key Components of Surveillance System

The surveillance system developed by Chainalysis is a pivotal aspect of this partnership. It encompasses various features aimed at enhancing security and compliance within the cryptocurrency ecosystem.

One crucial component is Sanctions Monitoring, which provides detailed information on addresses and transactions involving sanctioned entities. This enables a thorough understanding of any potential risks associated with such transactions.

Another key feature is Categorization, which breaks down USDT holders by type. This includes distinguishing between exchanges and darknet markets, allowing for a more nuanced analysis of transactional patterns.

Surveillance Into USDT Holders

Additionally, the system offers the Largest Wallet Analysis, which delves deep into the activities of significant USDT holders. This analysis provides valuable insights into potential risks and patterns of behavior within the ecosystem.

Furthermore, the Illicit Transfers Detector is integral to identifying transactions associated with illicit activities like terrorist financing. This feature helps in pinpointing crypto wallets that may pose risks or be linked to illicit or sanctioned addresses.

 By identifying activities like terrorist financing and detecting crypto wallets associated with illicit or sanctioned addresses, the collaboration significantly enhances the existing security measures.

Tether’s Response to Regulatory Pressure

This implementation is part of Tether’s ongoing efforts to enhance compliance measures in response to mounting regulatory pressure. Allegations have emerged regarding USDT’s role in circumventing international sanctions and facilitating illicit finance. For instance, Venezuela’s state-run oil company has reportedly been using USDT to bypass U.S. sanctions. A United Nations report highlighted USDT’s role in underground banking and money laundering in East Asia and Southeast Asia.

CEO Ardoino reiterated Tether’s dedication toward compliance saying, 

“Tether remains steadfast in its dedication to upholding the highest standards of integrity, and this collaboration reinforces our proactive approach to safeguarding our ecosystem against illicit activities.”

All Eyes On USDT

USDT, with over $110 billion in circulation, has faced increasing scrutiny from regulatory authorities. The stablecoin, which is pegged to the US dollar and backed primarily by US Treasury bonds, reported a net profit of $4.52 billion for the first quarter of 2024.

Tether’s proactive measures, including the collaborative partnership with 124 law enforcement agencies across 43 jurisdictions, demonstrate the company’s ambition to rely on strict compliance and monitoring standards.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

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