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Tether Stablecoin Taps Chainalysis for Anti-Money Laundering Compliance Tools
Tether is using Chainalysis' "Know Your Transaction" tool to create risk profiles for USDT users and monitor potentially suspicious activity.
By Nikhilesh De
Updated Sep 13, 2021, 12:17 p.m. Published Feb 12, 2020, 9:00 a.m.
Stablecoin issuer Tether is partnering with blockchain forensics firm Chainalysis to bolster its anti-money laundering tools.
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The companies announced Wednesday Tether would apply Chainalysis' "Know Your Transaction" tool for token issuers, allowing the stablecoin firm to monitor activity and "quickly understand the risk profile of each token holder," according to a press release.
USDT, the dollar-pegged stablecoin issued by Tether, is currently live on the omni, ethereum, EOS, liquid, tron and algorand blockchains. The company has also issued tokens pegged to gold (XAUT), the euro (EURT) and offshore Chinese yuan (CNHT).
"This solution allows us to ensure a secure compliance program that fosters trust with regulators, law enforcement agencies and users," Tether Chief Technology Officer Paolo Ardoino said in a statement. "This is achieved without sharing our user’s identifying information, as such data is only kept on our servers.”
Chainalysis has rapidly expanded since its formation five years ago, claiming to currently offer its services and tools to exchanges, financial institutions and government agencies in 40 different countries.
Last year, the company won $5 million in contracts from the U.S. federal government alone.
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