- Tether has teamed up with Chainalysis to track its token transactions on secondary markets
- The USDT stablecoin issuer has faced mounting criticism over its perceived association with criminal activity in the past year
- Tether will hope that its image will be improved through its partnership with Chainalysis
Tether has announced that it has joined forces with Chainalysis to monitor transactions with its tokens on secondary markets. The company has come in for increasing amounts of criticism over the past year for its links with criminal activity, and Tether will hope that the partnership with Chainalysis help it shed the image that it is now being inextricably tarnished with. The solution comprises a robust set of monitoring and analysis tools, including sanctions monitoring and an illicit transfers detector.
Mounting Pressure Forces Tether to Act
Tether has been cast as the villain in recent months, with criticism coming from a number of quarters: in January, the United Nations Office on Drugs and Crime argued that its USDT stablecoin has become “the preferred choice for regional cyberfraud operations and money launderers” in Southeast Asia, while just last week it was revealed that Venezuela’s state-owned oil company, PDVSA, was accepting payment for oil in USDT in order to bypass US sanctions.
These accusations came in the months after Tether took a proactive step in addressing concerns over the illicit use of USDT by revealing communications sent to US lawmakers in response to requests for intervention by the Department of Justice, letters aimed at shedding light on Tether’s “commitment to fighting illicit use of stablecoins.”
Too Little, Too Late?
It seems, however, that Tether has realized that the steps it has taken to alleviate the pressure on its operations haven’t had the desired effect, especially with Circle’s regulated USDC stablecoin gaining adoption among big players.
Its partnership with Chainlaysis, therefore, couldn’t come at a better time. The customized software, revealed in a press release, includes tools to help with the following:
- Sanctions Monitoring: Tracks and lists transactions and addresses linked to sanctioned entities
- Categorization: Segregates USDT holders by type, including exchanges and darknet markets, for targeted analysis
- Largest Wallet Analysis: Provides detailed insights into the activities and transactions of major USDT holders
- Illicit Transfers Detector: Detects transactions that may be connected to illegal activities, such as terrorist financing
Paolo Ardoino, CEO of Tether stated that the partnership reflects Tether’s desire to prove its integrity and security:
Our collaboration with Chainalysis marks a pivotal step in our ongoing commitment to establishing transparency and security within the cryptocurrency industry. Tether remains steadfast in its dedication to upholding the highest standards of integrity, and this collaboration reinforces our proactive approach to safeguarding our ecosystem against illicit activities.
Time will tell if its plan bears fruit and improves the company’s reputation, although, for many, it will be too little, too late.
