JPMorgan says US regulators can 'exert some control' over Tether via OFAC
Quick Take “U.S. regulators can exert some control on Tether’s offshore usage via OFAC,” according to JPMorgan analysts. Tether’s CEO said JPMorgan’s concerns seem “more related to the jealousy towards the evolution of financial and payment services.”
While Tether USDT -0.00% may not be a U.S. entity, American authorities can still exert a certain degree of control over the stablecoin issuer through the Office of Foreign Assets Control (OFAC), according to JPMorgan.
"U.S. regulators can exert some control on Tether's offshore usage via OFAC," JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a report on Thursday. "Tether's association with Tornado Cash, a privacy enhancement platform on the Ethereum network, is an example."
OFAC, a unit of the U.S. Treasury Department, sanctioned Tornado Cash in 2022, alleging it to be a key tool used by malicious actors for money laundering. At that time, Tether said it wouldn't bar Tornado Cash addresses as the company had not yet received any such requests from U.S. authorities. However, last December, Tether announced it had frozen its stablecoins held in crypto wallets sanctioned by OFAC as a "proactive" security measure, ultimately bending to OFAC.
When reached for comment, Tether CEO Paolo Ardoino highlighted the company's same December announcement and suggested that JPMorgan appears jealous of Tether's dominating position in the crypto market.
"JPMorgan's current concerns seem more related to the jealousy towards the evolution of financial and payment services, which they have been ignoring for a decade and now they're upset because it got a lot of traction," Ardoino said. "If I were them, I would be more concerned about their $39 billion total fines."
Earlier this month, Ardoino labeled JPMorgan "hypocritical" when the bank said that Tether's increasing concentration is negative for the crypto markets.
JPMorgan foresees decreased use of Tether with upcoming stablecoin regulations
Upcoming stablecoin regulations in the U.S. and Europe will impact Tether 's usage, according to JPMorgan analysts. These regulations would "likely put indirect pressure on Tether as its attractiveness would diminish relative to stablecoins with more transparency and greater compliance with new regulatory/KYC/AML standards," the analysts said. "This challenge for Tether would also apply to the DeFi space where Tether is widely used as a source of collateral and liquidity."
The analysts also expressed dissatisfaction with Tether's current disclosures, stating that they aren't enough to alleviate concerns.
"Tether's reports are still lacking a full and detailed asset breakdown and independent audits (instead of auditor's assurances)," they said.
Additionally, the analysts highlighted SP Global's weak rating for Tether's ability to maintain its peg to the U.S. dollar at 4 (with 5 being weak and 1 being strong). While Tether reported billions of dollars worth of profit last year due to high-interest rates and underlying assets' price appreciation, "there are significant price risks associated with assets other than U.S. T-bills," the analysts said.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
FUN drops by 32.34% within 24 hours as it faces a steep short-term downturn
- FUN plunged 32.34% in 24 hours to $0.008938, marking a 541.8% monthly loss amid prolonged bearish trends. - Technical breakdowns, elevated selling pressure, and forced liquidations highlight deteriorating market sentiment and risk-off behavior. - Analysts identify key support below $0.0080 as critical, with bearish momentum confirmed by RSI (<30) and MACD indicators. - A trend-following backtest strategy proposes short positions based on technical signals to capitalize on extended downward trajectories.

OPEN has dropped by 189.51% within 24 hours during a significant market pullback
- OPEN's price plummeted 189.51% in 24 hours to $0.8907, marking its largest intraday decline in history. - The token fell 3793.63% over 7 days, matching identical monthly and yearly declines, signaling severe bearish momentum. - Technical analysts cite broken support levels and lack of bullish catalysts as key drivers of the sustained sell-off. - Absence of stabilizing volume or reversal patterns leaves the market vulnerable to further downward pressure.

New spot margin trading pair — LINEA/USDT!
Bitget Live Trading Competition: Share 20,000+ USDT Prize Pool
Trending news
MoreCrypto prices
More








