Tether, which issues the world’s largest stablecoin, took a strategic step to strengthen security measures and prevent possible misuse of its tokens, announcing the freezing of wallets associated with individuals sanctioned by the US Office of Foreign Assets Controls (OFAC). This decisive action comes as part of Tether’s ongoing efforts to ensure responsible use of stablecoin technology and strengthen the overall stability of its ecosystem. Here are the details…
Tether is taking action against OFAC-listed addresses
In a recent blog post, Tether announced that it had frozen 41 wallets linked to people on OFAC’s Specially Designated Nationals (SDN) List. Describing these measures as “precautionary,” Tether aims to proactively prevent possible misuse of its tokens. Specifically, on-chain data reveals that some of the affected wallets have been using a coin mixing service called Tornado Cash within the last six months.
Tether CEO Paolo Ardoino emphasized the importance of these voluntary measures, saying, “By implementing voluntary wallet address freezing… we will be able to further strengthen the positive use of stablecoin technology and promote a safer stablecoin ecosystem for all users.” said. Among the wallets frozen is one associated with the $625 million Ronin Bridge attack, which the US Treasury Department attributed to North Korean hacking group Lazarus Group.
Security needs to be increased
Taking an important step under the leadership of CEO Paolo Ardoino, Tether has taken steps to freeze wallets linked to individuals sanctioned by OFAC. This voluntary action is framed as a preventive measure to prevent possible misuse of Tether tokens and increase overall security. Ardoino sees this as an extension of the company’s collaboration with global law enforcement and regulators. This decision marks a departure from Tether’s previous stance on wallets interacting with the sanctioned Tornado Cash protocol. While the company has refrained from freezing such wallets in the absence of requests from US law enforcement, the latest announcement reveals a change in policy.
Tether has not only frozen existing wallets on the OFAC list, but has also committed to freezing new additions in the future. In particular, the company signaled that it was taking a more assertive approach to compliance by blacklisting Tornado Cash’s contract addresses. Tether’s latest move reflects its commitment to protecting the integrity of the stablecoin ecosystem and cooperating with regulatory authorities. As the cryptocurrency landscape continues to evolve, such proactive measures by industry leaders contribute to a safer and more responsible crypto finance environment.
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