As regulators increase their scrutiny of stablecoin issuers, Tether has partnered with Chainalysis to monitor transactions of the leading USDT stablecoin on secondary markets. The collaboration aims to detect any transfers to sanctioned entities, terrorist organizations, hacker groups, or any other illicit activities.
Although criminal activities in the crypto world represent a small portion of overall activity, stakeholders are investing significant amounts to combat it. Tether, the company behind USDT, announced its partnership with Chainalysis this week. The New York-based blockchain analytics firm will develop customizable solutions to monitor the stablecoin’s secondary market activity, which accounts for nearly all of its transactions.
Through Chainalysis solutions, Tether will be able to systematically monitor transactions and gain a better understanding of the USDT market. The partnership will also provide intelligence to Tether’s compliance professionals and investigators, helping them identify risky wallets or addresses associated with illicit activities or sanctions.
The partnership is crucial for Tether, as USDT remains the largest stablecoin in the market, with a market cap of $110.94 billion. However, it has faced regulatory scrutiny for allegations ranging from Bitcoin manipulation to doubts about its 1:1 backing by the US dollar. The potential use of the stablecoin in criminal activities poses a significant risk, as demonstrated by cases against crypto giants such as Binance and BitMEX.
Stablecoins’ involvement in crime is not new. According to a report by Chainalysis, stablecoins accounted for 70% of all crypto scams and 83% of crypto sent to sanctioned entities in the previous year. The report also highlighted $24.2 billion in stablecoin volume related to sanction evasion in 2022 and 2023.
The partnership between Tether and Chainalysis is not only important for both companies but also for the entire crypto industry. Tether’s USDT is a significant player in crypto transactions.
In other news, the crypto market experienced marginal gains in overall market cap over the weekend, reaching $2.35 trillion at press time, up from $2.225 trillion on Friday. Bitcoin traded at $63,745, recovering from a dip to $56,000 following the sentencing of CZ and other industry figures.
Recommended for you:
– Buy Bitcoin Guide
– Bitcoin Wallet Tutorial
– Check 24-hour Bitcoin Price
– More Bitcoin News
– What is Bitcoin?
