Tether and Chainalysis roll out USDT monitoring solution to counter illicit transactions

Tether
has
announced
a
collaboration
with
blockchain
analytics
firm
Chainalysis
to
develop
a
customizable
solution
for
monitoring
secondary
market
activity.

The
monitoring
solution
developed
by
Chainalysis
will
enable
Tether
to
systematically
monitor
transactions
and
gain
enhanced
understanding
and
oversight
of
the
USDT
market.
It
will
also
serve
as
a
proactive
source
of
on-chain
intelligence
for
Tether
compliance
professionals
and
investigators,
helping
them
identify
wallets
that
may
pose
risks
or
may
be
associated
with
illicit
and/or
sanctioned
addresses.

Key
components
of
the
solution
include
Sanctions
Monitoring,
which
provides
a
detailed
list
of
addresses
and
transactions
involving
sanctioned
entities,
and
Categorization,
which
enables
a
thorough
breakdown
of
USDT
holders
by
type,
including
exchanges
and
darknet
markets.

The
system
also
offers
Largest
Wallet
Analysis,
providing
an
in-depth
examination
of
significant
USDT
holders
and
their
activities,
and
an
Illicit
Transfers
Detector,
which
is
integral
to
identifying
transactions
potentially
associated
with
illicit
categories
like
terrorist
financing.

“Cryptocurrency
is
transparent,
and
harnessing
that
transparency
to
partner
with
law
enforcement
and
freeze
criminal
funds
is
the
best
way
to
deter
its
use
for
terrorism,
scams,
and
other
illicit
activity,”
shares
Jonathan
Levin,
co-founder
and
Chief
Strategy
Officer
at
Chainalysis.

The
move
comes
amid
mounting
pressure
on
stablecoins
and
digital
assets,
with
global
regulators
eyeing
these
for
their
potential
role
in
circumventing
international
sanctions
and
facilitating
illicit
finance.

As
the
most
popular
stablecoin
with
over
$110
billion
in
circulation,
USDT
has
faced
increasing
scrutiny
from
regulatory
authorities.
Tether
claims
that
the
partnership
will
enable
it
to
“enhance
compliance
measures.”
The
stablecoin,
which
is
pegged
to
the
US
dollar
and
backed
primarily
by
US
Treasury
bonds,
is
managed
by
Wall
Street
trading
house

Cantor
Fitzgerald.

“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,”
shares
Tether
CEO
Paolo
Ardoino.

A
recent

report
from
Reuters
suggests
that
Venezuela’s
state-run
oil
company
has
been
using
USDT
to
bypass

US
sanctions,
while
a
United
Nations

report
from
January
highlighted
the
stablecoin’s
alleged
role
in
underground
banking
and
money
laundering
in
East
Asia
and
Southeast
Asia.
Notably,
Tether
has
worked
with
124
law
enforcement
agencies
across
43
global
jurisdictions
to
address
concerns
on
the
stablecoin’s
use
in
illicit
activities.