According to a recent report by The Wall Street Journal, the largest stablecoin by market cap Tether (USDT) reported a staggering net profit of $6.2 billion for 2023. The figure not only dwarfs the $5.5 billion net profit of the world’s largest asset management giant, BlackRock, but also highlights the growing concern over Tether’s role in potentially undermining the US’s global sanctions enforcement efforts.
Tether’s USDT and Lack of Oversight
While the news carefully scans Tether’s direct customers, USDT It was emphasized that it does not regulate the extensive secondary market where most of the transactions take place. This lack of oversight is particularly important since Tether’s network will be almost Visa This has raised red flags among regulators because it processes as many funds as cards. The company, on the other hand, employs fewer than 100 people to run its operations, a stark contrast to the size of BlackRock’s workforce and illustrates the sheer scale Tether has achieved with minimal staff.
A January 2023 United Nations Tether’s USDT in Southeast Asia, according to report money laundering The widespread use of stablecoins in unregulated secondary markets has made them a prime candidate for illicit activities, including money laundering and sanctions circumvention.
Cannot Completely Eliminate Associated Risks
Although Tether is publicly traded Blockchain While it can track all transactions in its ledger and has the authority to freeze or destroy USDT in any wallet, this enforcement power is not enough to completely eliminate the associated risks.
The Wall Street Journal highlighted the broader implications of Tether’s activities. US government As the U.S. steps up its crackdown on organizations involved in arms trafficking, sanctions evasion and financial fraud, Tether’s role in facilitating large-scale, unregulated transactions poses a significant problem.
Stablecoin‘s growing footprint in the financial ecosystem, operating in a largely unregulated space, would appear to pose problems for the stablecoin, as it appears to potentially undermine U.S. efforts to effectively enforce global financial sanctions.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
