Written by Elizabeth Howcroft
LONDON (Reuters) – The world's largest stablecoin has stepped up monitoring of how its tokens are used in the broader cryptocurrency and payments markets in a bid to combat illicit financing, Tether said in a statement on Thursday.
Tether, a cryptocurrency pegged to the US dollar, and blockchain analytics firm Chainalysis have launched new tools to identify transactions linked to sanctioned entities and analyze the activity of major token holders, Tether said.
Last month, Reuters reported that Venezuelan state-run oil company PDVSA was planning to increase the use of Tether in its crude oil and fuel exports at a time when the United States reimposed oil sanctions.
The Wall Street Journal reported last month that Russian intermediaries used Tether to evade Western sanctions in order to obtain weapons parts for drones and other military equipment.
A Tether spokesperson did not immediately respond to a Reuters request for comment, asking if there was a link between Thursday's announcement and the Reuters report on PDVSA. Tether's announcement did not mention either report.
Tether has previously stated that every action with cryptocurrency takes place online and can be traced, and “every asset can be seized and every criminal can be arrested.”
Tether has grown rapidly in recent years, with its value in circulation reaching $100 billion in March. Tether CEO Paolo Ardoino told Reuters last month that this growth was driven by its use as an alternative to the dollar in emerging markets.
Stablecoins can be used as a method of payment, as well as to transfer in and out of other tokens, such as Bitcoin, when trading on cryptocurrency exchanges.
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Tether, which is registered in Hong Kong and owned by a company registered in the British Virgin Islands, can freeze its digital currencies, and has previously said it did so in response to requests from law enforcement.