Tether, the USDT stablecoin company, is backing its decision not to freeze addresses associated with Tornado Cash. A notable difference with several US companies that did not hesitate to block communication with the cryptocurrency mixer from the very beginning of the riots. Considering this initiative premature, Tether says it is waiting for clear instructions from the US authorities to act accordingly.
No Sanctions on Tornado Cash to Tether Addresses
Following a Washington Post article that claimed Tether could flout US Treasury Department sanctions against Tornado Cash by not “blacklisting” associated USDT accounts, the company responded by saying it stands by its decision. In support of this position, the company states in a press release that it has not received any requests to this effect from law enforcement or regulatory authorities.
Recall that the Office of Foreign Assets Control of the US Department of the Treasury (OFAC) imposed sanctions on the Tornado Cash cryptocurrency mixer for allegedly being used to launder more than $ 7 billion in cryptocurrencies.
So far, OFAC has not indicated that a stablecoin issuer must freeze secondary market addresses that are published on the OFAC SDN list or that are operated by individuals and entities under OFAC sanctions.
Preceded by a reputation for being slow to follow the rules, Tether highlights its desire to operate within the law.
No US law enforcement agency or regulatory agency has made such a request, despite the fact that we are in almost daily contact with US law enforcement agencies, whose requests always contain specific information.
At least for now…
But as it stands, the company believes that a measure taken by, among others, its big competitor Circle, which immediately froze $75,000 in US dollars belonging to users of the crypto-mixer, would rather be counterproductive. The second stablecoin on the market, which has since lost capitalization, sanctioned by the crypto community, who did not appreciate his zeal in this area, should, from his point of view, take his time. His initiative may hinder ongoing regulatory investigations.
In our dealings with law enforcement, we occasionally become aware of addresses potentially linked to crime, and we have specific instructions not to freeze addresses without an explicit request from law enforcement, as this may alert suspects to law enforcement investigations, lead to liquidation or termination of operations . funds and jeopardize other links that may have been established.
In fact, there is confusion among crypto companies about the position that must be taken in order not to declare themselves outlaws. On the other hand, Tether, as a Hong Kong company, is questioning its commitment to comply with US Treasury Department sanctions rules, while saying it is willing to cooperate and enforce sanctions if a specific request is made. He also points out that he has carried out such operations in the past, thus maintaining “his world-class compliance program.”
Finally, Tether does not miss the opportunity to point out that it is not the only one taking a wait-and-see attitude. Indeed, unlike Github and Discord, which also retaliated against Tornado Cash, Paxos or MakerDAO did not enforce any sanctions.
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