Cryptocurrency has entered a sensitive phase with clouds of crypto scams and hacks hovering over the heads of individuals and organisations connected to crypto. Given the lack of vulnerabilities and security problems, Tether significantly collaborated with regulatory authorities to devise a security policy.
Tether’s new security policy came in an effort to mitigate and put an end to the vulnerabilities associated with cryptocurrency, especially stablecoin, such as Tether Token (USDT). It is essential to know that Tether is the pioneer of mining stablecoin, USDT. Unlike other crypto, stablecoin is faster and more accessible around the globe every time. It has the security of cryptocurrency with the stability of fiat currency, usually that of the U.S. dollar.
The Office of Foreign Assets Control (OFAC) issued a list of Specially Designated Nationals (SDN) with companies and users belonging to or controlled by restricted or sanctioned countries. Tether extended support for stopping crypto transactions to the list mentioned for a secure and fair crypto ecosystem globally.
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The Industry Leader of Stablecoin Issuer
Imagine a currency with dual characteristics, including fiat currency and digital assets based on blockchain technology. It is when the concept of stablecoin comes into existence with both qualities in adequate proportion. USDT makes up the first stablecoin built and exchanged on various blockchains for robust stability, unlike other digital tokens, such as Bitcoin (BTC) and altcoins. However, other stablecoins also exist in the market, including PayPal’s PYUSD and others.
It is the pioneer company with stablecoins, which makes up the major market volume of stablecoin. It works by pegging to a fiat currency on a 1-to-1 basis. It means that a stablecoin or digital token will be equal in value to that of its matched fiat currency alternate. However, Tether backs the stablecoin 100 per cent with its reserves, offering complete transparency for its reserve assets.
USDT works in a 5-step process, starting from users sending their fiat currency, such as the U.S. dollar, to the Tether bank, initiating the next step of converting or issuing a digital token USDT after cutting the network fees. Users can employ those digital tokens for trading or investment. Tether’s new security policy strengthens its stablecoin in the crypto market even further with an extra layer of safety.
Tether’s New Security Policy for Safe Crypto Transactions
In an effort to proactively secure the stablecoin and overall crypto ecosystem, Tether’s new security policy plays a key role. The cooperation with law enforcement and government regulatory authorities is a progressive step from Tether, introducing a voluntary wallet-freezing policy.
It has frozen 41 crypto wallets of users with the new policy to safeguard the stablecoin space. These crypto wallets belong to users that fall under the SDN list to stop illicit activities happening globally in the crypto and digital assets landscape.
Notably, Tether’s new security policy contradicts its narrative back in August 2022 when it claimed that Tether won’t freeze users from the SDN list unless regulatory organisations order it. Among the frozen crypto wallets, Tornado Cash pops up at the top since OFAC considers it a cryptocurrency tumbler or mixing service aiding malicious actors laundering over 7 billion U.S. dollars since 2019.
U.S. Office of Foreign Assets Control – An Overview
Every country intends to strengthen its foreign policy for a prosperous and lucrative well-being. The Treasury Department of the United States and its constituent body, OFAC, proactively deals with sanctions on companies and individual perpetrators of various countries that negate the policies of fair trade and legal activities.
SDN is one of the sanction lists issued by OFAC for stopping people controlled by targeted countries from propagating illicit activities, including terrorism and human and drug trafficking. The sanctioned organisations or people have no access to their assets in the United States, and no single U.S. citizen is allowed to deal with them.
As per statistics, Russia stands tall in the most sanctioned countries list amid the Russia-Ukraine conflict. However, the SDN includes a large number of companies and individuals from across the world with a history of direct or indirect involvement in unlawful and forbidden ventures.
Tether’s Efforts in Restraining Security Complications
Tether’s new security policy to freeze 41 crypto wallets clarifies the platform’s efforts to put an end to the intermittent use of stablecoin. The CEO of Tether, Paolo Ardoino, shares his thoughts about the security policy by stating that it will strengthen the positive use of stablecoin technology.
In effect of Tether’s new security policy, 41 wallets suffered from frozen assets. Click here to learn about Tether’s wallet-freezing acts earlier. The renowned crypto mixing service provider, Tornado Cash, is among the newly added members of the SDN, resulting in its wallet being frozen voluntarily by Tether.
Another wallet, which is allegedly associated with the 625 million dollars Ronin bridge hack, has also fallen prey to Tether’s voluntary wallet-freezing policy. Regulatory authorities also believe that Lazarus Group from North Korea is the driving force behind the mentioned crypto hack.
Tether’s New Security Policy Aims for Fair Crypto Ecosystem
The pioneer of stablecoin, Tether, is taking charge with the help of blockchain intelligence to support the actions of regulatory authorities, including OFAC. Tether’s new security policy of freezing the crypto wallets of sanctioned companies and persons will benefit the entire cryptocurrency environment.
After suffering from many hacks and fraud, crypto enthusiasts anticipate such stances from cryptocurrency platforms and services. It will not only improve the crypto environment, but Tether’s new security policy will also boost the confidence of crypto traders and investors, helping them stay strong in their quest to make riches.