Tether aligns with US OFAC regulators, unveiling new policy to fight cybercrime.
Tether, the world’s largest stablecoin issuer of USDT, with a market cap exceeding $90 billion, started to freeze crypto wallets tied to individuals and entities sanctioned by the US Treasury’s Office of Foreign Asset Control (OFAC).
This new policy involves proactively freezing wallets associated with individuals and entities listed on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) List. The SDN List comprises individuals and businesses owned or controlled by countries under sanctions.
An analysis of the Ethereum blockchain indicates Tether limited usage to 161 Ethereum addresses last Saturday. The vast majority – 150 of the 161 frozen wallets – now show zero balances for Tether’s dollar-pegged USDT coin. But oversight remains absent to determine whether or when those addresses held Tether tokens before the imposed freeze.
“By executing voluntary wallet address freezing of new additions to the SDN List and freezing previously added addresses, we will be able to further strengthen the positive usage of stablecoin technology and promote a safer stablecoin ecosystem for all users,” stated Paolo Ardoino, CEO of Tether.
The sanctions crackdown on Russia and Iran has accelerated crypto’s integration with traditional finance as firms recognize the reputational and regulatory risk of being branded as havens for illicit activity. The new policy involves freezing wallets previously added to OFAC’s list. Going forward, Tether will also freeze any new additions in a further bid to curb potential misuse of its tokens.
The move comes as regulators pressure crypto firms to bolster compliance and prevent usage by sanctioned parties like Russia. Stablecoins like USDT have faced particular scrutiny due to their extensive use on major exchanges like Binance.
“This strategic decision aligns with our unwavering commitment to maintaining the highest standards of safety for our global ecosystem and expanding our close working relationship with global law enforcement and regulators,” Ardoino said.
