Tether Trying Work in Tandem with Regulators Against Crypto Crime

Crypto is still a risky asset for a majority of lawmakers in the United States. The volatile price and shady users entering the market to defraud users are pinpoints that regularly remind lawmakers to keep their stance strict. Tether, a crypto company, recently wrote to the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ), and the Secret Service, highlighting that they have frozen $435 Million USDT from 326 digital wallets.

Bad Actors Aren’t At Bay Yet

With this, the company is showcasing its stand against ill practices in the sector. Cryptocurrencies are relatively a new kind of sector in the financial market and are vulnerable to hackers. New entrants unfamiliar with the technology become easy targets for them. In 2021, a fake cryptocurrency called Squid Game (leveraging the name of a famous television series) yanked out over $3 Million from its investors.

In the follow-up to a November letter, Tether wrote “These strategic relationships reinforce our commitment to supporting law enforcement in combating nefarious activities and contributing to the recovery of victims’ funds.” The letter further adds, “Tether has established a new standard in its commitment to security and close working relationships with law enforcement that we hope will be a model for the rest of the industry.”

Tether addressed the concerns raised by Senator Cynthia Lummis and Representative French Hill to Attorney General Merrick Garland during October 2023 regarding the potential use of stablecoins for activities including terrorist financing and money laundering. The company CEO, Paolo Ardoino, said in a blog post that they “seeks to be a world class partner to the U.S. as we continue to assist law enforcement and expand dollar hegemony globally.”

In November 2023, they highlighted that the company froze over 800 Million USDT where most of the assets were being used by bad actors. Over time, they claim to have helped the DOJ in freezing 188 addresses and holding 70 Million USDT.

Tether reported in October that they had frozen 32 accounts they suspected were related to malpractices in Ukraine and Israel. Ardoino noted that cryptocurrencies can be tracked easily using blockchain and “criminals foolish enough to employ cryptocurrencies for illegal activities will inevitably be identified.”

Blockchain explorers enable tracking of these transactions using transaction ID or hash. However, separate explorers are available for a particular blockchain. One cannot track a Solana (SOL) transaction on an explorer associated with Ethereum (ETH).

Crypto data aggregator Chainalysis reported in July 2023 that crypto-related crime has declined by 65 percent. Ransomware being the primary crime in the sector extorted nearly $450 Million through June. Victims lost almost a Billion dollars to cybercrime in 2021.

The DOJ revealed in August that their criminal division, Market Integrity and Major Frauds (MIMF), has charged “fraud cases involving over $2 billion in intended financial losses to investors from around the world.”

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.