Tether strengthens security and compliance efforts by announcing a policy to freeze wallets connected to OFAC’s SDN List.
The business that created the well-known stablecoin, Tether, has declared a major change in strategy toward regulatory compliance and law enforcement agency cooperation.
Tether announced its plan to voluntarily freeze wallets linked to people or organizations on the Specially Designated Nationals (SDN) List maintained by the US Office of Foreign Assets Control (OFAC) in a blog post dated December 9.
This list includes people and businesses owned or controlled by sanctioned nations, designating them as entities that Americans and their businesses are typically not allowed to do business with.
Tether Steps Up Initiatives to Combat Cryptocrime
The most recent policy from Tether, which went into effect on December 1, is to strengthen the security framework around its stablecoin operations.
Tether is stepping up its efforts to stop illegal activities, including funding terrorism and the unauthorized trafficking of drugs like fentanyl by putting restrictions in place to freeze activity connected to Sanctioned people on the OFAC’s SDN List.
This measure fits in with the larger plans of the US Department of Treasury, which restricts cryptocurrency transactions that might be linked to illegal activity by using the SDN List.
Tether’s optional wallet-freezing policy is anticipated to strengthen its security measures and highlight the company’s commitment to developing a safe and law-abiding stablecoin ecosystem. CEO of Tether, Paolo Ardoino said:
“By executing voluntary wallet address freezing of new additions to the SDN List and freezing previously added addresses, we will be able to strengthen the positive usage of stablecoin technology further and promote a safer stablecoin ecosystem for all users,”
This policy represents a significant change in Tether’s strategy for adhering to regulations. Tether stated in August 2022 that unless specifically instructed by law authorities, it will not proactively freeze Tornado Cash addresses that the OFAC has sanctioned.
Since 2019, the OFAC has accused Tornado Cash, a decentralized cryptocurrency mixer, of money laundering involving more than $7 billion in cryptocurrencies.
The move by Tether to proactively freeze wallets on the SDN List is a big one that shows how the corporation is changing its attitude toward regulatory cooperation.
This shift occurs as American officials keep a closer eye on Bitcoin companies. Despite the regulatory obstacles, Tether holds roughly 70% of the stablecoin market with a $90 billion market valuation.
This increase in market capitalization demonstrates how strong demand is for Tether despite governmental restrictions.
