Learn Concept: How Tether Implements Wallet-Freezing Policy to prevent Illicit Use of Stablecoins
By: Eliza Bennet
Tether, the global leader in stablecoin issuance, strategically freezes certain wallets in order to deter illicit usage of cryptocurrencies. Recently, Tether hindered 326 wallets, equivalent to USD $435 million, following instructions from the U.S. Government. This approach is a part of Tether's commitment towards becoming a world class partner to national institutions around the world.
This wallet-freezing policy, as part of Tether's measures against potential illegitimate activities, took effect from December 1. The policy ensures that any wallet included in the Office of Foreign Assets Control's (OFAC) Specially Designated Nationals (SDN) list are frozen. In a recent drive to enhance security, Tether has incorporated the Secret Service into its operations and is planning to involve the FBI as well.
The company's cooperation with 19 jurisdictions worldwide, specifically their efforts to identify and freeze wallets linked to Hamas and other terrorist organizations, showcases the reach and effectiveness of such practices. Tether's extensive Know Your Customer/Anti-Money Laundering (KYC/AML) initiative, along with assistance from Chainalysis and WorldCheck, enables it to keep information updated and observe transactions for irregular activities across significant blockchains.
