Chainalysis will assist Tether in keeping an eye out for illegal behaviour in the secondary market.

WHAT IS CHAINALYSIS?

Chainalysis is a blockchain data platform that helps government agencies, cryptocurrency businesses, and financial institutions engage confidently with cryptocurrency. Chainalysis uses on-chain data to trace crypto transactions, identifying scams, hacks, fraud, and illicit activity involving digital assets. The company was founded in 2014 by Michael Gronager, Jan Møller, and Jonathan Eldridge and is headquartered in New York City.

The blockchain analytics company will offer tools for identifying authorized and unauthorized activities in addition to market data.

Tether will be able to keep an eye on the stablecoin secondary market because of a solution developed by Chainalysis, a blockchain analysis company. Tether will be able to gather market intelligence and spot wallets that might be connected to prohibited or unlawful addresses thanks to these additional features.
There will be multiple tools in the new solution. Four of them were mentioned in a website announcement from Tether. A list of addresses and transactions involving sanctioned firms will be made available through Sanctions Monitoring. The Illicit Transfer Detector is designed to identify transactions that may be connected to illicit activity, such as financing terrorist operations.
Holders of Tether USDT $1.00 will be categorized based on their kind, such as exchange or darknet market. The activities of "significant" USDT holders will be the main focus of the greatest Wallet Analysis.

"Our collaboration with Chainalysis marks a pivotal step in our ongoing commitment to establishing transparency and security within the cryptocurrency industry,"

stated Paolo Ardoino, CEO of Tether. This partnership strengthens our proactive strategy for protecting our ecosystem from nefarious activity.
According to the announcement, Tether has worked with law enforcement in 43 jurisdictions "to address illicit activities." Nevertheless, the stablecoin's purported involvement in illegal activity and the funding of terrorism has put the corporation under scrutiny.
Even US Senator Cynthia Lummis, a crypto enthusiast, took issue with Tether and demanded in a letter to Attorney General Merrick Garland that Tether and Binance be looked into for their possible involvement in the October Hamas assaults on Israel. Representative French Hill, a cosigner with her, and she claimed that Tether was "knowingly facilitating violations of applicable sanctions laws."

Source: Tether

The role that cryptocurrency played in financing crime in the region was harshly criticized in a January report on organized crime in East and Southeast Asia by the United Nations Office on Drugs and Crime, which specifically mentioned USDT. In response, Tether stated that the company disregarded USDT's traceability.
Tether's lack of financial transparency has also drawn criticism. With a market capitalization of $109.8 billion, USDT far surpasses its closest rival, USD Coin USDC $1.00, with a market capitalization of $33.9 billion.