Tether, the stablecoin provider, has joined forces with blockchain analytics firm Chainalysis to develop a tool for overseeing secondary market operations.
In a bid to bolster its oversight of the USDT market, Tether has inked a partnership with Chainalysis, a New York-based blockchain intelligence company. Tether revealed in a blog post on May 2 that the solution created by Chainalysis will act as a proactive intelligence source for compliance investigators, enabling them to spot wallets that could pose risks or have links to illicit or sanctioned addresses.
Paolo Ardoino, CEO of Tether, emphasized, “Our collaboration with Chainalysis marks a crucial step in our ongoing commitment to promoting transparency and security within the cryptocurrency sector.”
The tool developed by Chainalysis comes with several features, including sanctions monitoring, which provides a rundown of addresses and transactions involving sanctioned entities. It also categorizes USDT holders based on their type, distinguishing between exchanges and darknet markets. Additionally, the tool features an illicit transfers detector, aiding in the identification of transactions potentially linked to illicit activities like terrorist financing, Tether added.
This partnership arrives amidst concerns raised by U.S. senators about the potential misuse of Tether’s stablecoin by countries such as Russia, Iran, and North Korea to evade Western sanctions. Recent allegations suggested that USDT facilitated Russian entities in sidestepping sanctions to procure drone components and other equipment abroad. Consequently, senators have questioned whether the Department of Defense and the Biden administration back the Treasury Department’s request for expanded powers.
Summary Review: Tether‘s collaboration with Chainalysis represents a significant step toward enhancing transparency and security within the cryptocurrency industry. By leveraging Chainalysis’ expertise in blockchain analytics, Tether aims to strengthen its oversight of USDT transactions on secondary markets, particularly in identifying and addressing potential risks associated with illicit or sanctioned activities. As regulatory scrutiny continues to increase, partnerships like this underscore the industry’s commitment to fostering trust and compliance in the evolving landscape of digital assets.
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