Stablecoin issuer Tether, behind leading stablecoin by market capitalization USDT, has taken a new step towards cooperation with law enforcement and regulatory agencies.
Stablecoin issuer Tether, behind leading stablecoin by market capitalization USDT, has taken a new step towards cooperation with law enforcement and regulatory agencies by introducing a voluntary wallet-freezing policy, according to a blog post on December 9. Since December 1, Tether has been offering secondary market controls to freeze transactions associated with individuals listed on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List. This list includes companies and individuals controlled or owned by sanctioned countries.
Tether emphasizes that this policy will complement existing security protocols and is a proactive effort to enhance collaboration with global regulators and law enforcement agencies. The U.S. Department of the Treasury has been utilizing the SDN List to prevent crypto transactions that may be linked to illicit activities, such as terrorism financing and unauthorized distribution of fentanyl.
Tether has already frozen wallets that were previously added to the SDN List, a move that contradicts the company's previous stance on the matter. In August 2022, Tether announced that it would not proactively freeze sanctioned Tornado Cash addresses unless instructed by law enforcement. According to the OFAC, Tornado Cash has been used by individuals and criminal organizations to launder over $7 billion in cryptocurrency since 2019.
Paolo Ardoino, the CEO of Tether, said:
"By voluntarily freezing new additions to the SDN List and previously added addresses, we aim to further strengthen the positive usage of stablecoin technology and promote a safer stablecoin ecosystem for all users."
So far, the company has frozen 41 wallets, including wallets using mixing service Tornado Cash and one wallet linked to the $625 million Ronin bridge hack, which is believed to be carried out by North Korean hackers Lazarus Group.
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