Tether Collaborates with DOJ & FBI

Tether collaborates with DOJ and FBI, enhancing compliance and combating illicit use of its cryptocurrency.

Recently, Tether has actively engaged with U.S. lawmakers and law enforcement agencies, including the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI), to reinforce its commitment to legal compliance and the fight against illicit financial activities. This move comes amid heightened scrutiny of digital currencies and their potential misuse.

Tether’s Engagement with U.S. Lawmakers and DOJ

Recently, Tether, the entity behind the widely-used stablecoin USDT, has been addressing concerns raised by U.S. senators and representatives regarding the potential misuse of its digital currency. In response to these concerns, Tether has sent detailed communications to key members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, as well as the U.S. House Financial Services Committee. These correspondences, dated November 16 and December 15, highlight Tether’s dedication to combating the illegal use of stablecoins.

The company’s outreach was a direct response to concerns voiced by Senator Cynthia Lummis and Representative French Hill. These lawmakers had previously urged the DOJ to thoroughly investigate the extent of Tether and Binance’s involvement in potentially supporting illicit activities, including terrorism financing. Moreover, this call for investigation followed an attack by Hamas against Israel on October 7, where concerns were raised about the financing of such activities through illicit cryptocurrency transactions.

In its proactive approach, Tether has emphasized its robust Know Your Customer (KYC) program, an effective transaction monitoring system, and its commitment to identifying and addressing suspicious accounts and activities. The company assures that it has consistently cooperated with law enforcement agencies and will continue to do so, particularly in identifying and freezing accounts involved in illegal activities or terrorism financing.

Furthermore, Tether revealed its use of advanced surveillance tools, such as Chainalysis’s Reactor tool, to continuously monitor client activities even after their onboarding. This tool is highly regarded in the field of blockchain surveillance and is utilized by numerous U.S. government agencies.

Tether’s Collaboration with FBI

Tether has onboarded the FBI onto its platform, demonstrating its commitment to working closely with law enforcement agencies. Moreover, this collaboration is a strategic effort to combat nefarious activities within the cryptocurrency space and assist in the recovery of funds for victims of such activities.

Additionally, on December 9, Tether announced the implementation of a voluntary policy to freeze wallets associated with individuals on the United States Office of Foreign Assets Control Specially Designated Nationals List. This marks a significant shift from their previous stance in 2022, where Tether was hesitant to proactively freeze wallets linked to irregular activities. The changing regulatory landscape and the intensified scrutiny of cryptocurrency firms both in the U.S. and globally have influenced Tether’s decision to adapt its policies.

Lastly, the ongoing regulatory focus on cryptocurrency firms in the U.S. has had a noticeable impact on the market. Tether’s market share, as reported by CoinMarketCap, stands at an impressive $90 billion. Tether’s CEO, Paolo Ardoino, has expressed the company’s aspiration to be a top-tier partner to the U.S., aiding law enforcement and reinforcing the global dominance of the dollar.