Stablecoin giant Tether is not a US institution. However, the altcoin project has been experiencing problems with US regulatory and supervisory authorities. According to JPMorgan, it is possible for American officials to step in for control through OFAC.
Off-shore use of the altcoin project is under the spotlight
According to JPMorgan, although Tether is not a US entity, American authorities can exercise a certain degree of control over the stablecoin issuer through the Office of Foreign Assets Control (OFAC). JPMorgan analysts led by Nikolaos Panigirtzoglou published a report on the subject. In this report, analysts included the following assessment:
U.S. regulators may exercise some control over offshore use of Tether through OFAC. Tether’s relationship with Tornado Cash, a privacy enhancement platform on the Ethereum network, is an example of this.
cryptokoin.comAs you follow from , OFAC, a unit of the US Treasury Department, sanctioned Tornado Cash in 2022, claiming that it was an important tool used by malicious actors for money laundering. At the time, Tether said it would not block Tornado Cash addresses. The reason for this was that the company had not yet received such a request from the US authorities. But last December, Tether announced that it was freezing stablecoins held in OFAC-sanctioned crypto wallets as a “proactive” security measure. Thus, he ultimately demonstrated that he had submitted to OFAC.
Paolo Ardoino: JPMorgan is jealous!
Tether CEO Paolo Ardoino highlighted the company’s same December announcement. He also suggested that JPMorgan was jealous of Tether’s dominant position in the crypto market. In this context, Ardoino made the following statement:
JPMorgan’s current concerns appear to be more about envy over the evolution of financial and payment services that they’ve ignored for a decade and now lament because it’s getting so much attention. If I were them, I’d be more worried about their total fines of $39 billion.
Meanwhile, JPMorgan said earlier this month that Tether’s increased concentration is a negative for crypto markets. After this, Paolo Ardoino called JPMorgan “hypocritical”.
JPMorgan: Tether usage will decrease with regulations!
According to JPMorgan analysts, upcoming stablecoin regulations in the US and Europe will affect the use of Tether. Analysts say these regulations “will put indirect pressure on the altcoin as its attractiveness will decrease compared to stablecoins with greater transparency and greater compliance with new regulatory/KYC/AML standards.”
Analysts also express their dissatisfaction with Tether’s current statements. They state that these are not enough to address concerns. In this context, analysts say, “Tether’s reports still lack a full and detailed asset breakdown and independent audits.” Analysts also note S&P Global’s rating on Tether’s ability to maintain its commitment to the US dollar. Because Tether’s rating is 4 (5 is weak and 1 is strong), meaning weak. Analysts also make the following assessments:
Tether made billions of dollars in profits last year due to high interest rates and appreciation in the prices of underlying assets. However, there are significant price risks associated with assets other than U.S. bonds.
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