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Tether, the organization responsible for the stablecoin Tether (USDT), has revealed letters addressed to U.S. lawmakers, responding to requests for intervention from the Department of Justice concerning the unlawful use of its stablecoin.
The correspondence was sent to members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Financial Services Committee on Nov. 16 and Dec. 15, outlining “Tether’s dedication to combating the illicit use of stablecoins.”
The letters are intended to address appeals from Senator Cynthia Lummis and Representative French Hill made in October, urging the DOJ “to thoroughly assess the degree to which Binance and Tether are offering material support and resources for terrorism.”
The legislators made these statements following Hamas’s coordinated attack on Israel on Oct. 7, which they indicated was partially facilitated by unlawful crypto transactions “providing substantial terrorism financing.”
In its reply, Tether emphasized that it has implemented a Know Your Customer (KYC) program, a transaction monitoring system, and a “proactive approach” to detect suspicious accounts and activities.
“We have consistently supported law enforcement when requested to act, and we remain fully committed to collaborating proactively with agencies worldwide. Tether has and will assist in identifying and freezing addresses that are subject to sanctions, involved in illicit activities, or engaged in any form of terrorist financing.”
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Furthermore, Tether highlighted that client evaluations do not conclude with their onboarding, asserting that it employs surveillance monitoring tools to continuously oversee client activity. “Specifically, Tether utilizes the Reactor tool from Chainalysis and obtains secondary market risk reports from this company. These surveillance tools are regarded as leading options for blockchain monitoring and are utilized by numerous U.S. government agencies to track activity on the blockchain.”
In a related update, Tether announced on Dec. 9 that it had implemented a voluntary wallet-freezing policy, providing secondary market controls to halt activity linked to sanctioned individuals on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
Previously, in 2022, Tether had declined to proactively freeze wallets connected to irregular activities. However, the heightened crackdown on crypto firms in the U.S. — and globally — led the company to reconsider its approach.
“Tether aims to be a world-class partner to the U.S. as we continue to support law enforcement and enhance dollar dominance worldwide,” stated Tether’s CEO Paolo Ardoino.
The increased scrutiny of crypto firms in the U.S. throughout 2023 has benefited USDT’s market share, which stands at $90 billion at the time of this writing, according to CoinMarketCap.
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