Tether and Chainalysis to Develop Secondary Market Monitoring Solution

Tether, the issuer of USDT, and security firm Chainalysis have entered into a partnership to create a system for tracking activity in the secondary market.

According to the press release, this pertains to “transactions occurring within the broader USDT ecosystem beyond the limited liability organizations that directly buy and sell the stablecoin.”

“The solution allows Tether to methodically monitor transfers, providing a deeper understanding and control over the USDT market. It also serves as a proactive source of information for compliance specialists and investigators, enabling the identification of wallets that pose a risk or are linked to criminal and/or sanctioned addresses,” the statement reads.

The Chainalysis tool includes several features:

• a sanctions monitoring system — provides a list of addresses and transactions of entities subject to restrictions;
• categorization — divides USDT holders by type, including exchanges and darknet markets;
• illegal transfer detector — flags potentially dangerous transactions;
• analysis of major wallets.

Tether emphasized that the company “actively combats illegal activity in the industry,” collaborating with 124 law enforcement units across 43 jurisdictions.

“Cryptocurrency is transparent, and using this transparency to cooperate with authorities and freeze criminal funds is the best way to prevent its use for terrorism, fraud, and other illegal activities,” noted Chainalysis co-founder and Chief Strategy Officer Jonathan Levin.

Earlier, U.S. Senators Elizabeth Warren and Roger Marshall sent a letter to the Treasury, the Department of Defense, and the White House expressing concerns about the use of cryptocurrencies to evade sanctions. The concerns specifically involved USDT.

Following news of Venezuela’s plans to evade U.S. restrictions using USDT, Tether announced its intention to block payments used for this purpose.

Back in December 2023, the stablecoin issuer confirmed its commitment to cooperating with authorities and law enforcement worldwide.

In the same month, the company announced the start of a new policy to freeze wallets whose owners are under U.S. sanctions.