Tether, the company responsible for the USDT stablecoin, has recently made public letters it sent to the U.S. Senate Committee on Banking, Housing, and Urban Affairs and the U.S. House Financial Services Committee. These letters highlight Tether’s dedication to security and its close cooperation with law enforcement agencies.
Tether’s Commitment to Security
One of the recent letters, written by Tether CEO Paolo Ardoino, emphasized the company’s decision to disable Tether tokens held in wallets associated with the Office of Foreign Assets and Controls (OFAC) sanction list. This action demonstrates Tether’s commitment to ensuring the integrity and security of its operations.
“We have disabled Tether tokens held in wallets associated with OFAC’s sanction list, reinforcing our commitment to complying with regulatory standards and preventing potential misuse of our tokens.”
– Paolo Ardoino
Tether claims to have assisted prominent law enforcement agencies, including the Department of Justice, U.S. Secret Service, and Federal Bureau of Investigation (FBI), in freezing 326 wallets controlling a total of 435 million USDT. This collaboration underscores Tether’s dedication to working hand-in-hand with law enforcement to combat illegal activities in the cryptocurrency space.
“We have successfully collaborated with the Department of Justice, U.S. Secret Service, and FBI to freeze 326 wallets holding a combined total of 435 million USDT.”
– Paolo Ardoino
However, it should be noted that the latest frozen wallets contain a smaller number of tokens compared to the previously mentioned sum. Despite this, Tether remains committed to its collaboration with law enforcement agencies.
Transparency and Compliance with Regulations
Tether has taken proactive steps to ensure transparency in its interactions with law enforcement agencies. The company’s letters were specifically addressed to Senator Cynthia Lummis, a well-known advocate of cryptocurrencies in the Senate, and were also sent to the chairs and ranking members of the Senate and House committees mentioned earlier.
Tether’s communication with legislators serves as a means to provide transparency regarding its cooperation with law enforcement and its efforts to comply with regulatory standards.
Freezing of Wallets and Link to Recent Hacks
Last week, Tether froze the wallets of individuals sanctioned by the U.S. Office of Foreign Asset Controls (OFAC) with the aim of preventing potential misuse of its tokens and enhancing security measures in alignment with global law enforcement and regulators.
According to blockchain data, Tether froze a total of 161 Ethereum wallets, although most of these wallets currently hold no USDT tokens. Among the remaining 11 wallets, over 3.5 million USDT tokens are held, with the majority concentrated in a single address that holds 3.4 million tokens. This address has been linked to a recent hack of the betting platform Stake.
While two addresses hold approximately 20,000 tokens each and one address holds nearly 60,000 tokens, the remaining wallets hold smaller amounts. In fact, one wallet contains just 16 cents worth of frozen USDT.
Tether’s Investments in Bitcoin
In May 2023, Tether announced its plans to allocate up to 15% of net realized profits into Bitcoin on an ongoing basis. This strategic move aims to protect Tether’s reserves from the loss of purchasing power during prolonged cryptocurrency market downturns.
Thanks to the recent surge in Bitcoin prices, Tether’s Bitcoin holdings have gained around 85%, equivalent to $1.1 billion, since their acquisition.
