Tether, the largest stablecoin issuer, is taking "proactive steps" to align its services with US sanctions policies and has announced a new "voluntary wallet-freezing policy."
Although Tether did not reveal any numbers in last week's announcement, Coindesk reported that the platform froze 41 wallets linked to persons and entities listed on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN). According to on-chain data, one of the frozen wallets is associated with the $625 million Ronin Bridge attack.
Tether Extends Support of Sanction Rules
Currently, the wallet-freezing policy is limited to wallets on Tether's platform. Now, it is extending its reach to the secondary markets, supporting global regulators and law enforcement agencies.
"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," said Paolo Ardoino, the CEO of Tether.
"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."
A Pivot to Comply with Sanctions
Interestingly, Tether's latest policies contrast its previous stances on sanctioned crypto. Last year, the company defied orders from security agencies stating that it was unwilling to sanction Tornado cash addresses.
????⛔️ Amazing. Tether has given 0 attention to compliance for 9 yrs. 3 weeks ago the FBI and Secret Service are “onboarded” onto the platform.Now suddenly they decide to “proactively enforce OFAC sanctions” and freeze wallets. They’ve been given the final ultimatum. pic.twitter.com/yvIfE1lSX2
— Rho Rider (@RhoRider) December 10, 2023
Although Tether did not highlight the event that triggered the company's policy change, it might have to do with the recent actions against Binance. The largest crypto exchange by trading volume recently settled with the US federal prosecutors, paying $4.3 billion for violations of money laundering and sanctions violations.
Earlier, the US agencies targeted other crypto platforms like Kraken and Poloniex for sanctions violations and slapped them with monetary penalties.
Tether's actions earlier this year can confirm its alignment with the sanctions rules. In October, the platform froze 32 addresses identified as involved in illegal activities in Israel and Ukraine. According to the company, it assisted about three dozen law enforcement agencies across nations in freezing $835 million in assets linked to theft and hacks.
This article was written by Arnab Shome at www.financemagnates.com.
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