Tether announces policy to freeze wallets linked to OFAC’s SDN List, bolstering security and compliance efforts. PromotedAd $PIKA – Fastest-growing GameFi token. Join the Presale Now! Pikamoon ($PIKA) – Join the Presale Now! By Maxwell Mutuma 4 hours ago Updated 4 hours ago
Tether, the company behind the prominent stablecoin, has announced a significant policy shift in its approach to regulatory compliance and cooperation with law enforcement agencies. In a recent blog post dated December 9, Tether revealed its initiative to voluntarily freeze wallets associated with individuals or entities on the United States Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.
This list comprises individuals and companies controlled or owned by sanctioned countries, marking them as entities with whom U.S. persons and firms are generally prohibited from conducting business.
Tether Intensifies Efforts Against Crypto Crime
Tether’s latest policy, effective since December 1, aims to bolster the security infrastructure surrounding its stablecoin operations. By implementing controls to freeze activities linked to Sanctioned persons on the OFAC’s SDN List, Tether is intensifying its efforts to prevent illicit activities, such as funding terrorism and unauthorized distribution of substances like fentanyl. This move aligns with the broader initiatives of the U.S. Department of the Treasury, which utilizes the SDN List to restrict crypto transactions potentially connected to criminal activities.
The voluntary wallet-freezing policy is expected to augment Tether’s security protocols, underscoring the company’s dedication to fostering a secure and compliant stablecoin ecosystem. Paolo Ardoino, CEO of Tether, emphasized the importance of this initiative, stating, “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.”
Decisive Action Against Sanctioned Crypto Addresses
This policy marks a notable shift in Tether’s approach to regulatory compliance. In August 2022, Tether declared that it would not proactively freeze Tornado Cash addresses sanctioned by the OFAC unless explicitly directed by law enforcement. Tornado Cash, a decentralized cryptocurrency mixer, has been implicated by the OFAC in laundering over $7 billion in cryptocurrency since 2019.
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Tether’s decision to proactively freeze wallets on the SDN List is a significant step, demonstrating the company’s evolving stance on regulatory cooperation. This change comes amidst heightened scrutiny of cryptocurrency firms by U.S. regulators.
Despite the regulatory challenges, Tether’s market capitalization has soared to $90 billion, capturing nearly 70% of the stablecoin market. This surge in market capitalization highlights the robust demand for Tether, even in a regulatory-constrained environment.
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