Tether Partners With Chainalysis To Boost Compliance and Monitor Sanctioned Addresses

Stablecoin issuer Tether is working with blockchain analysis firm Chainalysis to develop a solution for monitoring transactions involving entities beyond those that directly buy and sell USDT.

In a statement, Tether says the customizable solution for monitoring secondary market activities will offer an enhanced understanding and oversight of the USDT market. 

The company says compliance professionals and investigators can use the platform as a source of intelligence for identifying wallets that pose risks or may be associated with illicit and sanctioned addresses.

Tether adds that the platform’s suite of tools includes “Sanctions Monitoring,” which lists addresses and transactions involving sanctioned entities, and “Categorizations” which can break down USDT holders by type.

The solution also includes a tool for “Largest Wallet Analysis,” which gives an in-depth examination of significant USDT holders and their activities, and an “Illicit Transfers Detector” that can help in identifying transactions that may be associated with illicit categories.

Says Tether CEO Paolo Ardoino,

“Our collaboration with Chainalysis marks a pivotal step in our ongoing commitment to establishing transparency and security within the cryptocurrency industry.”

The development comes following a report from the United Nations Office on Drugs and Crime (UNODC) in January that alleged money launderers and fraudsters in East and Southeast Asia prefer to use Tether’s USDT in their illegal activities.

Blockchain intelligence company TRM Labs also reported that USDT was the most used dollar-pegged token for illicit transactions in 2023.

Tether previously said its collaboration with law enforcement authorities and the monitoring of USDT make the stablecoin an impractical choice for illicit transactions.

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