Stablecoin issuer Tether recently took precautionary measures by freezing 41 wallets associated with individuals listed on the Office of Foreign Assets Control’s (OFAC) Specially Designated Nationals (SDN) List. The move, described as a proactive step, aligns with Tether’s commitment to compliance and security. Some of the frozen wallets were found to have utilised the coin-mixing service Tornado Cash over the past six months, while one wallet was implicated in the $625 million Ronin Bridge attack, attributed to the Lazarus Group, a North Korean hacking organisation.
Tether CEO Paolo Ardoino emphasised the significance of the actions, stating, “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.”
Tether’s History of Wallet Freezing
This is not the first time Tether has taken such actions. In October, the company froze 32 wallets associated with terrorism and warfare in Ukraine and Israel. Additionally, Tether froze $225 million last month in connection to a human trafficking syndicate, following an investigation by the U.S. Department of Justice.
Tether’s New Security Policy and Collaboration with Law Enforcement
In response to evolving challenges, Tether announced a new security policy on December 9, aimed at enhancing the overall security of the cryptocurrency ecosystem. The voluntary wallet-freezing initiative specifically targets transactions involving Sanctioned Persons on the OFAC’s SDN List. While Tether already had a wallet-freezing policy applicable to its platform, the new measure extends sanctions control to the secondary market, showcasing the company’s commitment to collaborating with global law enforcement agencies.
Paolo Ardoino commented on the strategic decision, stating, “This strategic decision aligns with our unwavering commitment to maintaining the highest standards of safety for our global ecosystem and expanding our close working relationship with global law enforcement and regulators.”
Tether’s Large-Scale Transactions Draw Attention
In a separate development, Tether’s Treasury transferred $60 million worth of USDT to a “mysterious fund/institution” on December 8, according to blockchain analytics firm Lookin Chain. Since October 20, Tether has reportedly transferred a total of $1.76 billion USDT to this fund, which has been further dispersed to other exchanges. Tether’s large-scale transactions continue to attract attention, considering its prominent role in the crypto ecosystem, maintaining a $90 billion market cap value, representing over 70% dominance in the stablecoin market in 2023.
Tether’s Proactive Measures for Ecosystem Security
In a blog post on December 9, Tether introduced a voluntary wallet-freezing initiative as part of its efforts to enhance the security and integrity of its cryptocurrency ecosystem. While specific details of the new policy were not provided, the company’s proactive stance indicates a commitment to implementing measures that align with global regulatory standards and prevent misuse of its platform.