Analysts from JPMorgan have hinted at the possibility of U.S. financial authorities exerting more control over Tether, hinting at the Office of Foreign Assets Control (OFAC) as a facilitator for such actions. Tether’s CEO Paolo Ardoino has responded to these speculations with a critique, suggesting the banking giant’s stance might stem from a sense of envy due to Tether’s success in financial services that JPMorgan previously overlooked.
Increased Scrutiny on Tether’s Operations
A team led by Nikolaos Panigirtzoglou from JPMorgan has pointed out the increased potential for U.S. regulatory intervention concerning Tether, especially due to its connections with Tornado Cash, a privacy tool on the Ethereum network. This focus comes after OFAC’s past sanctions on Tornado Cash in 2022, citing its use for illicit activities such as money laundering.
Despite initial resistance to blocking Tornado Cash addresses, Tether took proactive measures in December of the previous year, freezing assets in wallets sanctioned by OFAC in line with security concerns and regulatory compliance requests.
Tether CEO Criticizes JPMorgan’s Stance
Ardoino responded to JPMorgan’s assertions by highlighting what he perceives as jealousy on the part of the bank towards Tether’s ascending trajectory in the crypto market. He dismissed the concerns raised by the analysts, framing them as a result of JPMorgan’s neglect of burgeoning financial sectors and resenting their newfound recognition.
Earlier, Ardoino had already dismissed JPMorgan’s claims about the negative impact of Tether’s growth on the cryptocurrency markets as hypocritical. JPMorgan analysts have cautioned that with looming stablecoin regulations, Tether’s use could diminish, and that regulatory developments in Europe may further complicate Tether’s standing, with potential repercussions for the DeFi sector.
