Key Takeaways
- Tether partners with Chainalysis to monitor USDT transactions for illicit activities.
- The monitoring aims to comply with international sanctions and identify risky transactions.
- Reports have highlighted USDT's use in underground banking and sanction evasion.
Tether has initiated a partnership with Chainalysis to monitor transactions involving its USDT token.
Announced on Thursday, this effort focuses on identifying potentially illicit activities across secondary markets.
Enhancing compliance and security
The primary aim of the monitoring system is to ensure adherence to international sanctions and to pinpoint illicit transfers.
This move is in response to increased scrutiny by global regulators.
Broadening surveillance against illicit uses
The implementation of the Chainalysis system marks a strategic step in addressing concerns over USDT’s usage in illicit financial activities.
A United Nations report and other findings suggest that USDT has been utilized for underground banking and money laundering, especially prevalent in East and Southeast Asia.
Additionally, Venezuela’s state-run oil company reportedly used USDT to circumvent U.S. sanctions, showcasing the critical need for rigorous monitoring to prevent such abuses.
