Tether announces wallet-freezing policy for OFAC-sanctioned persons

Tether plans to expand regulation to the secondary market to assist US authorities. And it has indicated that it is voluntarily freezing wallets, marking another step towards collaboration with law enforcement and regulatory bodies. 

Tether has been providing secondary market restrictions since December 1st to stop any transactions with sanctioned individuals listed as Specially Designated Nationals (SDN) by the US Office of Foreign Assets Control (OFAC). 

The list includes persons and businesses owned or controlled by sanctioned nations. Tether states that the policy is a “proactive effort to work even more closely with global regulators and law enforcement agencies” and will enhance current security procedures.

The U.S. Department of the Treasury actively utilized the list to halt cryptocurrency transactions that may associated with criminal activities, including the financing of terrorism and the unauthorized sale of fentanyl.

In a departure from its previous stance on the matter, Tether actively froze wallets that were previously listed on the SDN List. Tether said in August 2022 that it would not aggressively freeze authorized Tornado Cash addresses unless directed to do so by law authorities. 

Since 2019, the OFAC claims that people and criminal groups have laundered over $7 billion in Bitcoin using Tornado Cash.

 the CEO of Tether.”By executing voluntary wallet address freezing of new additions to the SDN List and freezing previously added addresses, we will be able to further strengthen the positive usage of stablecoin technology and promote a safer stablecoin ecosystem for all users,” stated Paolo Ardoino, the CEO of Tether.

The Hong Kong-based company is the driving force behind the stablecoin Tether USDT$1.00, whose market valuation hit record highs during the recent U.S. crackdown on cryptocurrency companies. Its $90 billion market capitalization at the moment suggests that there is a significant market for the stablecoin, which accounts for around 70% of the total.