The USDT operator said it would leverage the technology of Notabene to meet FATF compliance standards. The news arrives at a time of increased regulatory pressure for stable coins.
The stable coin issuing company USDT has joined efforts with the Notabene firm to combat financial crimes in transactions with digital currencies.
The company reported the trial partnership in a statement Tuesday. According to Tether, the agreement will allow the company to use the software of Notabene to fight against money laundering in cross-border transactions. The startup provides technology for cryptocurrency exchanges to help them identify their users and track transactions.
The connection with a firm like Notabene will aid Tether in its quest to comply with the Financial Action Task Force (FATF) travel rule, which needs financial institutions to exchange customer information by both senders and recipients of relevant transactions. This news got reported by the company through a statement shared on its Twitter account.
Tether Intends to Comply with FATF Standards
The FATF, a Paris-based global money-laundering watchdog, expanded its guidelines for cryptocurrency compliance to include exchanges and issuers of stable coins referred to as Virtual Asset Service Providers or VASPs.
The entity has determined that VASPs must adhere to the same rules as regulated financial institutions, including the Travel Rule, which advises companies to exchange customer-specific information between counterparties for transactions with a value of more than a certain amount.
These measures intend to help nations and service providers prevent money laundering, terrorist financing, and compliance with sanctions laws. Commenting on the new agreement, the chief compliance officer of Tether, Leonardo Real, focused his thoughts on the importance of working with other industry vendors.
An Outlook of Increased Regulatory Pressure
The company is trying to comply with FATF guidelines, and it stands in contrast to the recent controversial events the company has faced. Earlier this month, Tether received a wave of criticism after a Bloomberg report highlighted that the company had billions of dollars in Chinese debt products when the Evergrande crisis shook international markets.
On the other hand, the issuer of the stable coin and its sister company Bitfinex got fined by the US Commodity Futures Trading Commission (CFTC) for $ 42.5 million for misrepresenting documents about the endorsement of USDT. These latest investigations and accusations by regulators have prompted criticism from the community alleging a lack of transparency from Tether.
Notabene brings innovative technology to monitor cryptocurrency transactions in real-time.
This technology makes the blockchain more transparent and allows regulators to track cash flow. In particular, Tether will apply Notabene’s technology to detect whether it can transmit identifying data for customers on other VASPs.
Tether stated that they are dedicating a lot of effort to keep up with the new policies and to helping to shape them. Tether sees this alliance as an opportune time to foster cooperation through traditional and digital channels to create better services for clients globally.
By: Jenson Nuñez
