U.S. Treasury Official Alarms: The Stability of Tether Is at Risk

There is a serious concern regarding the increasing global misuse of crypto coins, especially in crime, war, and high inflation.

The Deputy Secretary of the Treasury, Wally Adeyemo commented on the stablecoins in a speech at a Blockchain Association event.

He emphasized the urgent need for cryptocurrency issuers outside the U.S. to actively prevent stablecoins from being utilized by hostile entities like terrorists. Here, he mentioned their dollar-backed coin but didn’t specifically name Tether stablecoin.

However, his message was a clear call for action, pointing out the importance of implementing tough measures on cryptocurrencies. These actions will ensure that these stablecoins don’t become a safe space for illegal activities.

Now, this situation comes with a complex challenge. Should the crypto coins issuers be held accountable for preventing their misuse? Or, could such responsibilities obstruct innovation and progress in the cryptocurrency industry?

Warnings on Balancing Responsibility and Innovation

Adeyemo first attracted the attention with his previous speech at the CoinDesk’s Consensus 2022. Here he supported crypto’s innovative potential but urged proactive measures in this industry.

That way they can discourage the use of cryptocurrencies by criminal organizations and terrorists. He criticized the need for more responses from smaller and larger firms in addressing illegal activities within the crypto market.

The Deputy underlined this situation as a clear and present threat to national security, with it referencing the U.S. settlement with Binance.

This was a settlement that highlighted the allegations of Binance being used for conducting illegal transactions. U.S. authorities believed that the crypto platform was being used for drug trafficking, terrorism, and exploitation.

Adeyamo directly addressed those operating in the stablecoin industry who believe that the law cannot reach them. He noted to them that practices like aiding terrorists, criminals, and rogue states won’t go under the rug.

The Part of Crypto Mixers

Additionally, the Deputy also advised that the cryptocurreny industry utilizes information exchanges such as the banks with the U.S. authorities. That way they can locate and punish terrorists.

According to the Treasury, a crypto mixing service from North Korea called Sinbad was involved in hacker transactions. This highlighted the government’s commitment to combating illegal financial operations.

Chinalysis’ annual report in 2022 stated Sinbad as the key tool in North Korean Lazarus, a state-backed hacking group. Their discoveries confirm what the Treasure presented to the public.

Experts in the field support this assessment, noting that Sinbad was actually a rebranded version of Blender. The previous version called Blender was a mixer that OFAC blacklisted in 2022.

In the middle of all of this, Tether’s USDT managed to trade near its midway for five days straight. The crypto coin is 0.04% above its five-day low and 0.09% below its high. It is worth noting that the actual low is $0.999623.

Sinbad’s exposure and Stark’s warning reveal how vulnerable stablecoins are without the crypto regulations. Many crypto users don’t agree with tough regulations as they feel like they’ll lose the most valuable feature, anonymity. Let’s wait to see how the crypto sector will react in the coming period.