By Elizabeth Howcroft
LONDON (Reuters) – The world’s largest stablecoin has stepped up monitoring of how its tokens are used in broader crypto markets and payments in a bid to combat illicit financing, Tether said in a statement on Thursday.
Tether, a cryptocurrency pegged to the US dollar, and blockchain analytics firm Chainalysis have launched new tools to identify transactions linked to sanctioned entities and analyze the activity of major holders of the token, Tether said.
Last month, Reuters reported that Venezuelan state oil company PDVSA plans to increase the use of Tether in crude oil and fuel exports, at a time when the US has reimposed oil sanctions.
The Wall Street Journal reported last month that Russian intermediaries had used Tether to bypass Western sanctions to obtain weapon parts for drones and other military equipment.
A Tether spokesperson did not immediately respond to a Reuters request for comment asking whether there was a connection between Thursday’s announcement and the Reuters report on PDVSA. Tether’s announcement did not mention either report.
Tether has previously said that every action involving the cryptocurrency is online and traceable, and that “any asset can be seized and any criminal caught.”
Tether has grown rapidly in recent years, reaching $100 billion in circulation in March. That growth is due to its use as an alternative to the dollar in emerging markets, Tether CEO Paolo Ardoino told Reuters last month.
Stablecoins can be used as a means of payment, but also to exchange and exchange other tokens, such as bitcoin, when trading on crypto exchanges.
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Tether, which is registered in Hong Kong and owned by a company registered in the British Virgin Islands, can freeze its tokens and has previously said it has done so in response to requests from law enforcement agencies.
