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Tether Explains its Collaboration with Authorities in an Open Letter

Walter Swift

ByWalter Swift

Dec 18, 2023

Tether is reinforcing its commitment to fighting crypto-related crime involving USDT tokens by partnering with the FBI and the Secret Service.

Under the leadership of its newly appointed CEO, Paolo Ardoino, Tether is intensifying efforts to tackle the misuse of its stablecoins for illegal activities, aiming to strengthen the integrity of the cryptocurrency realm. 

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The company recently rolled out a new policy that freezes wallets linked to individuals on the SDN list, resulting in more than 200 getting the boot. Now, they’re gearing up to step up their game even further.

In a recent communication to US lawmakers, Tether’s CEO elaborated on the company’s strategy to prevent bad actors from exploiting their stablecoins. 

The strategy includes collaborating with law enforcement heavyweights like the Secret Service and the FBI.

Tether Affirms its Dedication to Combatting Criminal Activities

On December 15, Tether, the USDT stablecoin issuer, outlined its steadfast dedication to curtailing the unlawful utilization of its stablecoins in communications directed at members of the US Senate Committee on Banking, Housing, and Urban Affairs, as well as the US House Financial Services Committee.

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Highlighting its strong commitment to establishing a sustainable and robust framework, Tether committed to complete cooperation with law enforcement in combating illicit activities such as terrorist funding.

In the correspondence, Tether’s CEO, Paolo Ardoino, elaborated on the company’s recent endeavors in combating criminal activities. 

He emphasized implementing a new policy that enabled the freezing of wallets, which assisted law enforcement in limiting access to more than 200 wallets with over 3.5 million USDT tokens.

The stablecoin provider highlighted its collaboration with the US Department of Justice, the US Secret Service, and the FBI as a tangible demonstration of its partnership with law enforcement agencies. 

Additionally, they indicated that this collaboration aided in freezing 326 wallets, amounting to over $435 million.

To further demonstrate their commitment to supporting law enforcement efforts, Tether’s CEO announced in the letter that the company had engaged with the US Secret Service and was in the process of doing the same with the FBI.

Tether’s communication closely follows US Senators urging the Department of Justice to examine the stablecoin issuer’s operations.

Senators Push the DoJ for Action

In a formal communication addressed to US Attorney General Merrick Garland dated October 26, Senator Cynthia Lummis and Representative French Hill issued a joint letter urging the Department of Justice (DoJ) to take substantial action regarding the allegations surrounding Tether’s involvement in illicit activities. 

Their urgent plea specifically implored the DoJ to promptly arrive at a “charging decision on Binance” and expedite the ongoing investigations related to Tether’s operations.

The lawmakers’ communication outlined grave concerns, asserting that Binance and Tether had actively facilitated illicit activities by providing significant material support and resources. 

Allegations included claims of aiding in the circumvention of applicable sanctions laws and violations of the Bank Secrecy Act, purportedly contributing to the financing of terrorism through cryptocurrency transactions.

Moreover, the senators highlighted another critical aspect of their concern, alleging that despite being fully aware of extremist groups using stablecoins for illegal activities, Tether and its associated entities failed to conduct adequate screenings. 

The lawmakers’ letter to the Attorney General focused on the purported negligence in conducting comprehensive screenings despite knowledge of stablecoin usage for illegal activities.

 The letter emphasized the lawmakers’ grave concerns about the purported failure of stablecoin issuers to curb the misuse of their platforms for illegal purposes. 

The plea to the DOJ underscored the urgency of swift action to address these alleged infractions, emphasizing the need to uphold regulatory standards and prevent cryptocurrencies from being exploited for unlawful activities.

The formal communication to the US Attorney General aligned closely with the growing scrutiny and regulatory focus on cryptocurrency operations within the legislative landscape. 

Also, it indicated an increasing emphasis on enforcing compliance and preventing the misuse of digital assets for illicit purposes within extant financial regulations.

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Walter Swift

Walter Swift

Walter Swift is an adept crypto writer, known for his deep insights into the decentralized world. His pieces artfully break down complex blockchain topics, making them accessible to a broad audience. With a passion for emerging technologies, Walter's articles are a beacon for crypto enthusiasts and novices alike.

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