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Tether CEO Paolo Ardoino has penned letters addressed to key legislators, including Senator Cynthia Lummis, emphasizing the company’s commitment to security and collaboration with law enforcement agencies. Tether, the creator of the USDT stablecoin, seeks to maintain its reputation for stability while fostering transparency in its operations.
Tether, widely recognized as a stablecoin pegged to the US dollar, has consistently provided investors with a safe haven amid the tumultuous cryptocurrency market. It currently ranks as the fourth-largest cryptocurrency by market capitalization. The coin’s unique price stability mechanism involves maintaining a reserve of US dollars equal to the number of USDT tokens in circulation, ensuring full cash backing for each token.
While Tether has faced criticism for its lack of financial transparency, it remains the longest-standing stablecoin in the crypto industry. Despite calls for greater disclosure, Tether has managed to maintain its position and reputation.
The Freezing of the Wallets
Ardoino detailed Tether’s collaboration with the Department of Justice, U.S. Secret Service, and Federal Bureau of Investigation (FBI) in freezing 326 wallets containing 435 million USDT. Although the most recent frozen wallets held fewer tokens, Tether continues to work closely with the United States Secret Service and is in the process of onboarding the FBI. These partnerships underscore Tether’s dedication to maintaining operational integrity and security through law enforcement cooperation.
Tether Releases Letters Shared With The U.S. Senate Committee On Banking, Housing, And Urban Affairs And The U.S. House Financial Services Committee
Read More ⬇️https://t.co/wK9iU4ht6i
— Tether (@Tether_to) December 15, 2023
This move was aimed at individuals sanctioned by the U.S. Office of Foreign Asset Controls (OFAC) and its purpose was to prevent potential misuse of its tokens and aligning with global law enforcement and regulatory standards. Out of the 161 Ethereum wallets frozen, only 11 still held USDT tokens, with a substantial portion concentrated in a single address linked to a recent betting platform hack.
Tether’s Investments in Bitcoin
Tether’s strategic decision to allocate up to 15% of net realized profits into Bitcoin raised concerns when announced in May 2023. Critics worried about the inherent volatility of Bitcoin and its potential impact on Tether’s stability and the broader cryptocurrency market. However, recent price surges have seen Tether’s Bitcoin holdings appreciate significantly, mitigating some of these concerns.
Tether claims that its commitment to security and law enforcement collaboration is evident in its proactive measures to freeze sanctioned wallets and build partnerships with agencies like the FBI and Secret Service. Additionally, its decision to invest in Bitcoin, though initially met with skepticism, has proven advantageous in light of recent market trends. Critics point that this kind of actions are contrary to the ethos of crypto which is to provide a medium that is safe from government interference. Tether supporters, however, argue that they, instead reflect Tether’s dedication to both stability and adaptability within the crypto space.
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