Tether, the company behind the popular USDT stablecoin, has started using a compliance tool created by blockchain analysis firm Chainalysis to track suspicious transactions and to “quickly understand the risk profile of each token holder.”
In an announcement, Chainalysis revealed Tether will be using its Know Your Transaction (KYT) software to look for potential illicit activity being conducted using its stablecoins. The announcement details the tool will allow Tether to monitor a token’s “full lifecycle, from issuance to redemption.”
The company details that its customers were already able to monitor suspicious activity involving USDT since April 2019, but now Tether itself can monitor the cryptocurrency’s usage “enabling the real-time tracking of suspicious transactions.”
Paolo Ardoino, Tether’s Chief Technology Officer, noted the firm has a responsibility to regulators and the cryptocurrency ecosystem to “have transparent, automated compliance solutions in place to handle any amount of volume at any given time.” Ardoino added:
This solution allows us to ensure a secure compliance program that fosters trust with regulators, law enforcement agencies and users. This is achieved without sharing our user's identifying information, as such data is only kept on our servers.
There are now over 4.6 billion USDT tokens in circulation, each tied to one U.S. dollar. The stablecoin was initially launched on the Omni layer, on top of the Bitcoin blockchain, but in January 2018 it went live on Ethereum, before being added to EOS, TRON, Algogrand, and the Liquid Network.
Tether has also issued stablecoins tied to the euro (EURT), to the offshore Chinese yuan (CNHT), and to gold (XAUT).
Featured image via Pixabay.