Tether will leverage Chainalysis’ solutions to monitor the secondary market for its stablecoin to gain more visibility and identify wallets that may be involved in illicit activities or sanctions evasion.
The new solution includes both a sanctions screening tool and an illicit activity detection engine, allowing it to flag transactions that may be tied to terrorism financing and other illegal operations.
Paolo Ardoino, Chief Executive Officer of Tether, said:
“Our engagement with Chainalysis marks a significant step in our ongoing commitment to establish transparency and security in the digital currency industry. […] This collaboration reinforces our proactive approach to protecting our ecosystem from illicit activity.”
The announcement notes that Tether has worked with law enforcement in 43 jurisdictions “to address illicit activity.” However, the company has faced criticism over its stablecoin’s alleged role in criminal activity and terrorist financing.
A report by the United Nations Office on Drugs and Crime, focusing on transnational organized crime in East and Southeast Asia that was published in January heavily criticized cryptocurrencies’ role in financing crime in the region and pointed at USDT specifically. Tether responded by saying that the report had ignored USDT’s traceability.
