Tether Holdings Limited, the issuer of the largest stablecoin by market cap, USDT, recently announced integrating Notabene to manage regulatory and counterparty risk in crypto transactions.
Tether to Crack Down on Illegal Transfers
As per an announcement on Tuesday, Tether will be testing the Notabene platform to comply with the Crypto Travel Rule —a mandate established on June 20, 2021, by the Financial Action Task Force (FATF).
Notabene’s end-to-end solution will allow Tether to crack down on illegal transfer by transmitting user data for large cryptocurrency transfers to VASPs.
In order to assist cryptocurrency exchanges, digital wallet providers, and financial institutions with the new FATF Travel Rule requirement, #Tether will begin testing the Notabene platform.⬇️https://t.co/9gUpq15As6
— Tether (@Tether_to) October 26, 2021
The Travel Rule stipulates that Virtual Asset Service Providers (VASPs) must comply with the same laws as regulated financial institutions and mandatory organizations. VASPs must carry out KYC (Know Your Customer) processes and exchange related client information between counterparties when transferring a certain amount of digital assets.
Tether is “Fully Committed To Transparency”
The move comes after Tether has been under scrutiny by regulatory agencies like the U.S. Commodity and Futures Trading Commission (CFTC), which fined Tether and its parent company Bitfinex to pay fines worth $42.5 million over misleading claims about the USDT token.
Tether claims to comply with global regulatory guidelines and to fully commit to transparency.
“It’s important that we work with other large VASPS to build this industry from the ground up. As pioneers of blockchain technology and leaders in transparency, we are dedicated to not only keeping up with new rules but helping shape them. Because the Travel Rule traditionally applies to financial institutions, we see this as an opportune moment to foster cooperation across traditional and digital channels in order to create better services for customers globally.” Said Leonardo Real, CCO of Tether.
However, Tether’s detractors don’t think the same. As CryptoPotato reported, Bloomberg published a controversial report titled “Anyone Seen Tether’s Billions?” — claiming that the stablecoin issuer is a fraud as it doesn’t have the assets to back the USDT token.