{"id":89812,"date":"2024-02-16T22:10:00","date_gmt":"2024-02-17T03:10:00","guid":{"rendered":"https:\/\/ifintechworld.com\/?p=89812"},"modified":"2024-02-16T22:10:03","modified_gmt":"2024-02-17T03:10:03","slug":"u-s-regulators-can-influence-tethers-offshore-usage-jpmorgan","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=89812","title":{"rendered":"U.S. Regulators Can Influence Tether&#8217;s Offshore Usage: JPMorgan"},"content":{"rendered":"<div>\n<div class=\"row mb-20\">\n<div class=\"col-12 col-lg-9 col-xl-8\">\n<div class=\"author-section\">\n<div class=\"author-info\">\n<p>\n                                                            <span>Last updated:<\/span><br \/>\n                                                        <time datetime=\"2024-02-16T23:41:53+00:00\"><br \/>\n                              February 16, 2024 18:41 EST                            <\/time><br \/>\n                                                             <span class=\"date-v-line\">|<\/span> 3 min read\n                                                    <\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div><figcaption class=\"wp-caption-text\">Tether Logo \/ Source: Adobe<\/figcaption><p><span data-preserver-spaces=\"true\">Tether\u2019s (USDT) dominant position as the largest stablecoin faces regulatory challenges and risks from various authorities and jurisdictions as they seek to impose more transparency and compliance on stablecoins.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The stablecoin is vulnerable due to its dependence on the American market and pending regulations. Despite Tether\u2019s headquarters not being based in the U.S., regulators can exert influence over its offshore usage through the Office of Foreign Assets Control (OFAC), JPMorgan (JPM) said in a research report Thursday.\u00a0<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">JPMorgan Report Highlights U.S. Authorities\u2019 Influence Over Tether and Stablecoin Regulation<\/span><\/strong><\/h2>\n<p><span class=\"replacer\"><\/span><br \/><span data-preserver-spaces=\"true\">In a recent research report issued on Thursday, JPMorgan (JPM) analysts shed light on the extent of control American authorities can exert over Tether, the issuer of the widely used stablecoin USDT. Despite Tether\u2019s status as a non-U.S. entity, the Office of Foreign Assets Control (OFAC), a unit of the U.S. Treasury Department, holds sway over its operations, impacting its offshore usage and regulatory compliance.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Analysts led by Nikolaos Panigirtzoglou warned that forthcoming stablecoin regulations would likely exert \u201cindirect pressure\u201d on Tether, reducing its attractiveness relative to stablecoins that demonstrate greater transparency and compliance with new regulatory standards such as Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Tether has faced mounting pressure to enhance transparency regarding its reserve holdings and has made efforts towards publishing real-time data. However, JPMorgan expressed scepticism, stating that the latest disclosures by the stablecoin issuer were insufficient to alleviate concerns. This pressure would extend to decentralized finance (DeFi) platforms, where USDT serves as a primary source of collateral and liquidity.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The report highlighted that stablecoin regulations are expected to be coordinated globally via the Financial Stability Board (FSB) across the G20, further restricting the use of unregulated stablecoins like Tether.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">JPMorgan analysts highlight Tether\u2019s association with Tornado Cash<\/span><span data-preserver-spaces=\"true\">, a privacy enhancement platform on the Ethereum network, as an example of OFAC\u2019s influence. Tornado Cash was\u00a0<\/span><span data-preserver-spaces=\"true\">sanctioned by OFAC<\/span><span data-preserver-spaces=\"true\">\u00a0in 2022 for alleged involvement in money laundering activities, prompting Tether\u2019s adherence to regulatory directives.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Tether initially resisted<\/span> <span data-preserver-spaces=\"true\">but ultimately froze its stablecoins held in crypto wallets<\/span><span data-preserver-spaces=\"true\"> sanctioned by OFAC in December, citing proactive security measures. The report stated that, while legal actions against offshore entities and decentralized firms are complex, indirect measures and international cooperation could potentially impede its usage.<\/span><\/p>\n<h2><strong><span data-preserver-spaces=\"true\">Tether CEO Criticizes JPMorgan Comments<\/span><\/strong><\/h2>\n<p><span class=\"replacer\"><\/span><br \/><span data-preserver-spaces=\"true\">Tether CEO Paolo Ardoino responded to JPMorgan\u2019s concerns, highlighting the company\u2019s proactive measures in response to regulatory actions. He argued that such claims were hypocritical coming from the world\u2019s largest bank, highlighting perceived double standards in the discourse surrounding market concentration.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">He suggested that JPMorgan\u2019s apprehensions might stem from jealousy over Tether\u2019s growing dominance in the crypto market, contrasting it with the bank\u2019s regulatory challenges. Ardoino said,<\/span><\/p>\n<blockquote>\n<p><em><span data-preserver-spaces=\"true\">\u201cJPMorgan\u2019s current concerns seem more related to their jealousy towards the evolution of financial and payment services, which they have been ignoring for a decade, and now they\u2019re upset because it got a lot of traction. If I were them, I would be more concerned about their $39 billion total fines.\u201d<\/span><\/em><\/p>\n<\/blockquote>\n<p><span data-preserver-spaces=\"true\">However, the upcoming stablecoin regulations in the U.S. and Europe are expected to impact Tether\u2019s usage, according to JPMorgan analysts. The looming regulations are likely to diminish Tether\u2019s attractiveness relative to stablecoins with greater transparency and compliance with regulatory standards, affecting its role in the decentralized finance (DeFi) space as well.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">JPMorgan analysts expressed dissatisfaction with Tether\u2019s current disclosure practices, stating that they fall short of addressing concerns. They particularly highlighted the lack of a detailed asset breakdown and independent audits in Tether\u2019s reports.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Additionally, the analysts pointed out S&amp;P Global\u2019s weak rating for Tether\u2019s ability to maintain its peg to the U.S. dollar, citing significant price risks associated with its underlying assets beyond U.S. Treasury bills. While Tether r<\/span><span data-preserver-spaces=\"true\">eported substantial profits<\/span><span data-preserver-spaces=\"true\">\u00a0last year due to high interest rates and asset price appreciation, concerns linger about the stability of its peg amidst volatile market conditions.<\/span><\/p>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/u-s-regulators-can-influence-tethers-offshore-usage-jpmorgan.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last updated: February 16, 2024 18:41 EST | 3 min read Tether Logo \/ Source: AdobeTether\u2019s (USDT) dominant position as the largest stablecoin faces regulatory challenges and risks from various authorities and jurisdictions as they seek to impose more transparency and compliance on stablecoins. The stablecoin is vulnerable due to its dependence on the American [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":89813,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-89812","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>U.S. Regulators Can Influence Tether&#039;s Offshore Usage: JPMorgan | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Last updated: February 16, 2024 18:41 EST | 3 min read Tether Logo \/ Source: Adobe Tether\u2019s (USDT) dominant position as the largest stablecoin faces\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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