Tether and Chainalysis have teamed up to build a new monitoring system for USDT, to monitor stablecoin activity on secondary markets.
The stablecoin company behind USDT has announced a collaboration with blockchain analytics platform Chainalysis to develop a new compliance-focused solution.
In a press release, Tether reported that the new solution will be focused on the USDT stablecoin compliance in the secondary market, where broader commercial activity takes place with this digital asset, beyond the limited entities that directly buy and sell the stablecoin.
According to the company, through this new monitoring solution, it will be possible to methodically monitor USDT transactions, which will offer a broader view of the stablecoin market, allowing regulatory agencies and compliance and intelligence analysis companies to identify any suspicious transactions or activities with the crypto asset.
Taking a new approach to security and compliance
Tether CEO Paolo Ardoino has boasted about the new measures implemented by his company to strengthen security and compliance.
As is well known in the crypto industry, Tether has faced pressure from financial regulators over the lack of clarity which dominated for years in its digital ecosystem. The company has been under the scrutiny of regulators, mainly, for the lack of transparency it maintained in relation to the USDT reserves. However, after complying with the fine imposed by the state of New York, which had banned its use in 2021, and rumors spread about the investigations that agencies such as the Treasury Department were carrying out, the company has focused on strengthening the transparency of its reserves and ensuring compliance.
Just as it he pointed Tether, the monitoring solution developed by Chainalysis will allow you to focus on the compliance with sanctions, creating a detailed list of wallet addresses of sanctioned entities, ranging from individuals, companies, and countries. Tether also highlighted that the new solution allows for categorization, which will facilitate a comprehensive breakdown and classification of all USDT holders by type, including exchanges and darknet markets.
On the other hand, the USDT developer emphasized that the new monitoring solution will also offer a broader and deeper wallet analysis, as well as a function of Illicit Transfer Detector, which will examine the activity of stablecoin holders to detect potentially suspicious or illicit transactions.
According to Ardoino, this solution will be crucial for transparency and security within the cryptocurrency industry.
Tether's record profits in Q1
The market cap of USDT has increased by over $18.800 billion since the beginning of January. This is indicative of the stablecoin's market dominance. However, thanks to the expansion of its stablecoin, as well as the increase in its BTC holdings, Tether reported a record profit of $4.520 billion in the last quarter, which is 58% higher than the earnings reported in Q2023 XNUMX.
The announcement of the new monitoring solution and the release of the Q1 2024 earnings report come amid new regulatory plans to strengthen compliance in the crypto industry.
In the United States, Wyoming State Representative Cynthia Lummis introduced a bill to regulate stablecoins as payment methods. Likewise, in the European Union, the MiCA (Markets in Crypto-Assets) Act is about to come into force, which will oversee the activity of the crypto market. On this latest regulation, Ardoino hinted that USDT might not be regulated in the EU in the short term, because the compliance requirements set by MiCA are too strict and difficult for stablecoin issuers to meet.
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