In response to growing calls from U.S. lawmakers for the Department of Justice (DOJ) to step in regarding the illicit use of its stablecoin, Tether, the company behind USDT, has made its position clear. The firm has shared communications sent to key members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Financial Services Committee. These communications, sent on Nov. 16 and Dec. 15, detail Tether’s commitment to combating the illegal use of stablecoins.
Responding to Calls for DOJ Action
The letters were a direct response to the demands made by Senator Cynthia Lummis and Representative French Hill in October. These lawmakers had urged the DOJ to thoroughly assess the extent to which Binance and Tether might be aiding terrorism. This call to action came after the lawmakers suggested that the coordinated attack on Israel by Hamas on Oct. 7 was partially funded by illicit cryptocurrency transactions, thereby providing significant financing for terrorism.
Tether’s Measures Against Illicit Activities
As part of its response, Tether outlined its efforts to fight illicit activities, including:
- A robust Know Your Customer (KYC) program
- An effective transaction monitoring system
- A proactive approach to identifying suspicious accounts and activities
The company emphasized its commitment to assisting law enforcement agencies globally and its readiness to identify and freeze accounts involved in illicit activities or any form of terrorist financing.
Continuous Surveillance and Voluntary Wallet-Freezing Policy
Furthermore, Tether assured that its client review process extends beyond the onboarding stage. The company utilizes leading blockchain surveillance tools, such as the Reactor tool from Chainalysis, to continuously monitor client activity. In a significant policy shift, Tether also announced on Dec. 9 that it had implemented a voluntary wallet-freezing policy. This policy aims to freeze activity related to individuals on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
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Start now using our tools for free.Despite the increased scrutiny of crypto firms in the U.S., Tether’s market share has grown, with its value standing at $90 billion at the time of writing, according to CoinMarketCap. As Tether responds to US lawmakers’ calls for DOJ action, it’s clear that the company is committed to maintaining its position as a leading player in the crypto market while ensuring compliance with global regulations.
