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Tether Implements Chainalysis Surveillance to Tackle Illicit Crypto Activities

Tether partners with Chainalysis to enhance security and transparency in crypto transactions, targeting illicit activities and compliance.
Tether Implements Chainalysis Surveillance to Tackle Illicit Crypto Activities

Highlights

  • Tether collaborates with Chainalysis to monitor USDT in secondary markets.
  • New tools focus on sanctions monitoring and detecting illicit transfers.
  • Tether supports compliance in 43 jurisdictions with law enforcement partnerships.

Tether, the issuer of the stablecoin USDT, has entered into a partnership with blockchain data platform Chainalysis. This partnership is meant to strengthen the surveillance of transactions with Tether tokens, with special emphasis on the detection and diminishing of dangers that are related to illegal activities and sanctions violations.

This action is part of Tether’s consistent attempts to improve compliance measures in response to growing regulatory pressure in different countries.

The new system, which Chainalysis developed, will allow Tether to monitor, track, and analyze the transactions on the secondary markets where USDT is traded. Utilizing modern instruments for the control of sanctions and detection of illicit transfers, the initiative aims to detect potentially risky wallets and transactions that may be related to the sanctions list or associated with money laundering and terrorist financing.

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Tether’s Regulatory Challenges and Oversight

Tether’s moves to improve its transaction monitoring systems have come during a time of growing pressure on the stablecoin operator from regulators worldwide. Issues have been raised regarding the possibility of using USDT to bypass international sanctions and cover different illicit financial activities. 

For example, there have been allegations that USDT was used by Venezuela’s state-owned oil company to skirt U.S. sanctions. In addition, a UN report released at the beginning of this year reveals that USDT is widely adopted in underground banking and money laundering throughout East Asia and Southeast Asia.

To these challenges, Tether has chosen to be proactive in enhancing its compliance framework. Through the use of Chainalysis’s technology, Tether seeks to maintain the suitability of the platform under its control, as such a system can be used to conduct illegal activities. Thus, Tether supports broader industry activities aimed at preserving the integrity of the cryptocurrency ecosystem.

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Monitoring Tools and Their Functions

The partnership provides a range of sophisticated tools to analyze the flow of USDT beyond the basic market transactions managed by Tether. These tools comprise of Sanctions Monitoring and Illicit Transfers Detector characteristics. The former gives an extensive list of transactions connected to the sanctioned entities, while the latter helps in finding suspicious financial flows, particularly those that could be related to terrorist acts. Through this integration, Tether is seeking to detect and manage the risk of high-risk wallets and transactions ahead of time.

Another crucial part of the system is the Largest Wallet Analysis, which allows for the examination of the main USDT holders and their transaction patterns. Such analysis helps in finding the distribution and movement patterns of huge volumes of USDT, another feature that is important for the detection of anomalies and potential threats.

The CEO of Tether, Paolo Ardoino, emphasized the importance of this collaboration as a crucial move in the direction of absence and transparency of the cryptocurrency market. The proactive measures implemented by Tether, which includes the cooperative partnership with 124 law enforcement agencies across 43 jurisdictions today, demonstrate the company’s ambition to be the main depending on strict compliance and monitoring standards.

Meanwhile, Tether also announced a massive improvement in its economic performance, which is a net profit of 4.52 billion dollars for the 2024 first quarter. This success is attributed to the company’s strong operations and targeted investments across different sectors, such as AI, renewables, and blockchain technology.

Read Also: Bitcoin-Focused Wasabi Wallet Developer zkSNACKs Is Leaving The US

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Kelvin Munene Murithi

Kelvin Munene is a crypto and finance journalist with over 5 years of experience, offering in-depth market analysis and expert commentary . With a Bachelor's degree in Journalism and Actuarial Science from Mount Kenya University, Kelvin is known for his meticulous research and strong writing skills, particularly in cryptocurrency, blockchain, and financial markets. His work has been featured across top industry publications such as Coingape, Cryptobasic, MetaNews, Cryptotimes, Coinedition, TheCoinrepublic, Cryptotale, and Analytics Insight among others, where he consistently provides timely updates and insightful content. Kelvin’s focus lies in uncovering emerging trends in the crypto space, delivering factual and data-driven analyses that help readers make informed decisions. His expertise extends across market cycles, technological innovations, and regulatory shifts that shape the crypto landscape. Beyond his professional achievements, Kelvin has a passion for chess, traveling, and exploring new adventures.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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