- The goal of this collaboration is to improve the oversight of USDT transactions.
- Regulators across the globe have been putting pressure on Tether, prompting the move.
A collaboration between blockchain data platform Chainalysis and USDT stablecoin issuer Tether has been announced. The goal of this collaboration is to improve the oversight of Tether token transactions, particularly with regard to the identification and mitigation of risks associated with illicit activity and sanctions breaches.
This move is in line with Tether’s ongoing efforts to enhance compliance procedures in light of increasing regulatory scrutiny across several nations. Chainalysis built a new technology that Tether may use to keep tabs on USDT trades on secondary marketplaces and evaluate them.
Rising Regulatory Pressure
Moreover, the initiative’s goal is to identify suspicious wallets and transactions that might be linked to the sanctions list, money laundering, or terrorist funding by using current tools for the management of sanctions and detection of illegal transfers.
Regulators across the globe have been putting increasing pressure on Tether, prompting the company to take steps to strengthen its transaction monitoring systems. The potential for USDT to evade global sanctions and mask other illegal financial operations has prompted concerns.
One example is the claim that Venezuela’s state-owned oil business utilized USDT to evade U.S. sanctions. Plus, a United Nations research from earlier this year shows that USDT is commonly used for underground banking and money laundering in Southeast Asia and East Asia.
Tether has decided to take the initiative in improving its compliance structure in response to these concerns. Because any platform that Tether controls might be used for illicit purposes, the company is using Chainalysis’s technology to ensure that their platform remains suitable. Therefore, Tether backs industry-wide efforts to protect the crypto ecosystem.
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