Tether freezes $182 million in one day
Original title:Other faces its Euroclar movement
Original by Izabella Kaminska
Original by Peggy, Block Beats
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The editor's move to freeze approximately $182 million USSTT on the Tron chain was seen by some analysts as its Euroclar moment, that is, when a financial infrastructure that was originally used as a neutral channel began to cooperate with law enforcement to freeze assets, it became part of the power border instead of just stabilizing the currencyã
THIS PAPER DRAWS ON VENEZUELA'S FUNDING DISPUTE TO DISCUSS HOW THIS EVENT MIGHT IMPACT THE US$ REPLACEMENT NARRATIVE OF USDT IN THE GLOBAL SOUTH AND THE SANCTIONS AREA, AND TO REDEFINE THE RISK PERCEPTION OF A STABLE CURRENCYã
The following is the original text:
The biggest piece of news this week was Tether's freezing of about $182 million of five wallet addresses in a day on the Tron chain, known as one of its largest single-day operations to dateã
It is suspected that these assets may belong to the Venezuelan Government and that Tether, long regarded as a "port of illegal financial flows", is seizing (or freezing) sovereign assets at the request of the United States Governmentã
What we can now confirm is that this operation was indeed done under the compliance and enforcement process. Although there is no official confirmation that these addresses are âVenezuelan oil revenuesâ, analysts and chain observers are generally reading the connectionã
NETWORK DISCUSSIONS HAVE ALSO REVEALED THAT SOME OF THE FROZEN FUNDS MAY OVERLAP WITH THE WALLET ADDRESSES USED FOR RELATED ACTIVITIES IN VENEZUELA, AND THAT THIS SPECULATION IS NOT EMPTY GIVEN THE COUNTRY ' S HIGH RELIANCE ON USDTã
According to the Wall Street Journal, Venezuela ' s oil trade has become deeply entangled with Tether ' s stabilization currency. According to the report, a podcast of the Venezuelan economist AsdrÚbal Oliveros mentioned that the stabilization currency created a âdirect linkâ between the Venezuelan economy and the encrypted world, which was driven mainly by the oil industryã
Among the podcasts, Oliveros stated that nearly 80 per cent of the country's oil revenues were being collected in the form of encrypted or stable currencies. He added that it was this massive inflow of digital assets that led to the emergence of the USDT as a recurrent key word in Venezuelan business exchanges and business operationsã
However, Oliveros also stressed that it would be difficult for the Government to convert these encrypted assets into liquidity that could be used by the real economy, since a series of compliance checks were required to convert them to usable currencies. This has led to large amounts of money being "locked" in the chain. As a result, Venezuela ' s oil revenues did not flow back into the domestic economy, affecting the official exchange rate and causing it to soarã
Oliveros also suggests that the Venezuelan Government is not professional in managing its encrypted currency and stabilizing currency wealth. He mentioned that, owing to excessive reliance on individual wallets, lack of internal compliance processes or regular reconciliation mechanisms, some wallets ' assistive notes/keys could be mistreated or even lost in the management disorderã
Survival problem
If it is finally proved that the frozen funds belong to Venezuela, then everyoneâs concern is how this could affect Tetherâs reputation as an âalternative monetary systemâ in developing countries, especially in those regions where financial instability or international sanctions have been imposedã
On Tuesday, at the launch at the London Stock Exchange of Bytetreeâs new Bitcoin + Gold Portable ETN Product BOLD, prominent London-encrypted and gold-investment circles speculated that the event could have a strong impact, or even a far greater impact, on the stabilization currencyã
Bitcoin investors, advocates, and comedians, Dominic Frisby (who is also an active supporter of digital privacy), stated to The Peg that he was not surprised that the incident would cause international sovereign investors to be disturbed by assets denominated in euros/dollars, as was the discussion of the "official seizure of Russian assets held in Euroclar" in that year, thereby causing a panic about encrypted capitalã
Despite the fact that Tether is often described as âlack of regulation, high risk, non-complianceâ, over the past year this currency stabilizer has not masked its growing cooperation with law enforcement agencies around the world, even though it continues to be based in relatively relaxed and encrypted El Salvadorã
Tether CEO Paolo Ardoino stated to The Peg in October that Tether is the only stable currency and encryption company that often cooperates with the US Department of Justice (DoJ) and that the FBI and the US Secret Service have been incorporated into its system of cooperationã
"We frozen Garantex's assets with them. While confirming this move, he also states that Tether is expanding its presence in the financial markets of large commodity-related supply chainsã
According to the Wall Street Journal, TRM Labs, a block chain surveillance company, works with Tether to help track illegal activities in the Tron chain involving USDT. TM Labs Global Policy Leader, Ari Redbord, said to the media that the role of a stable currency in Venezuelan society is complex: âThey may be a lifeline for civilians or a tool of circumvention under the pressure of sanctions.â I don't know
THIS STATEMENT HIGHLIGHTS A CENTRAL REALITY: USDT, AS A FINANCIAL LIFELINE, IS DEEPLY EMBEDDED IN THE VENEZUELAN ECONOMY, HELPING ORDINARY PEOPLE TO COMBAT HYPERINFLATION; AT THE SAME TIME, HOWEVER, ITS TECHNOLOGY IS ALSO BEING USED BY THE WRONGDOER TO TRANSFER FUNDS, THUS RAISING CONCERNS ABOUT SANCTIONS COMPLIANCEã
However, Tether has now proved that it is also willing to freeze USDT on networks such as Tron when the address is marked for sanctions or illegal connections. In other words, even if a stable currency takes on a local role in the critical financial infrastructure, it does not have immunity from âhuman enforcementâã
More importantly, this move has taken place after a recent policy in Brussels (EU) âsustained brakesâ: after years of posturing, planning, and legal preparations, the EU eventually hesitated to take the final step of âunequivocal confiscation of Russiaâs frozen assetsâ for fear that it would reduce the attractiveness of euro assets to international investorsã
Thus, markets and countries may receive signals that the money is placed in stable currencies such as Tether, perhaps at a higher risk than in official assetsã
It remains to be seen whether this reality will pose a "survival threat" to Tether's offshore business model in the coming weeks or months. But within the encryption circle, a strong view is spreading: international investors may no longer look at stabilization currencies in the way they used toã
At the very least, the incident shows that the influence of the so-called Donroe Doctrine is no longer confined to geopolitical and national games, but is entering the heart of global financial markets. And from any angle, Tether is at the heart of this sphere of influenceã
To date, Tether ' s anchor has remained stable, with the exception of minor fluctuations over the past month. The real pressure signal would be a significant slowdown â or even more dangerous scenario â in the flow of funds: the beginning of a shift from net inflows to net outflowsã
Tether's next reserve certificate is expected to be released in late January or early Februaryã
Tether to the U.S. Dollar (USD)
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