Tether CEO’s Letter Emphasizes Cooperation with Law Enforcement and Stablecoin Stability.

adminDecember 18, 2023

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Tether CEO Paolo Ardoino sent a letter to key lawmakers, including Senator Cynthia Lummis, emphasizing the company’s commitment to security and cooperation with law enforcement. Tether, the creator of the USDT stablecoin, is seeking to maintain its reputation for stability while increasing transparency in its operations.

Tether, widely known as a stablecoin pegged to the U.S. dollar, has continued to provide a safe haven for investors amidst the turbulent cryptocurrency market. It is currently the fourth largest cryptocurrency by market capitalization. The coin’s unique price stability mechanism includes maintaining US dollar reserves equal to the number of USDT tokens in circulation, ensuring full cash backing for each token.

Tether has been criticized for its lack of financial transparency, but it remains the longest-standing stablecoin in the cryptocurrency industry. Despite calls for more information disclosure, Tether has maintained its position and reputation.

My wallet is frozen.

Ardoino detailed Tether’s cooperation with the Department of Justice, the U.S. Secret Service, and the Federal Bureau of Investigation (FBI) in freezing 326 wallets containing 435 million USDT. Although the most recent frozen wallet holds a smaller amount of tokens, Tether continues to work closely with the US secret service and is in the process of joining the FBI. These partnerships highlight Tether’s commitment to maintaining operational integrity and security through law enforcement cooperation.

Tether released correspondence it shared with the U.S. Senate Committee on Banking, Housing and Urban Affairs and the U.S. House of Representatives Committee on Financial Services.
Learn more ⬇️https://t.co/wK9iU4ht6i
— Tether (@Tether_to) December 15, 2023

The move targeted individuals sanctioned by the U.S. Office of Foreign Assets Control (OFAC) and was aimed at preventing potential misuse of tokens and complying with global law enforcement and regulatory standards. Of the 161 frozen Ethereum wallets, only 11 still hold USDT tokens, with a significant portion concentrated in a single address linked to the recent hack of the betting platform.

Tether’s Bitcoin Investment

Tether’s strategic decision to allocate up to 15% of its net realized profits to Bitcoin raised concerns when it was announced in May 2023. Critics have raised concerns about Bitcoin’s inherent volatility and Tether’s stability and its potential impact on the broader cryptocurrency market. However, the recent price surge has led to a significant increase in Tether’s Bitcoin holdings, allaying some of these concerns.

Tether claims its commitment to security and law enforcement cooperation is evident in its active actions to freeze approved wallets and build partnerships with agencies such as the FBI and Secret Service. Additionally, the decision to invest in Bitcoin, although initially skeptical, has proven to be advantageous considering recent market trends. Critics say this kind of behavior goes against the spirit of cryptocurrencies, which aim to provide a medium safe from government interference. However, Tether supporters argue that it reflects Tether’s commitment to stability and adaptability within the cryptocurrency space.