JPMorgan analysts suggest that regulatory bodies in the US may apply some pressure on Tether, which could be facilitated by OFAC. OFAC is an official institution in America that controls foreign assets. In response to this, Tether’s CEO commented that JPMorgan’s concerns seem to be related to “jealousy towards the growth of financial and payment services.”
Report Says This About Tether
Analysts led by Nikolaos Panigirtzoglou at JPMorgan released a report today. Highlighting the potential for US controls at this stage where Tether’s offshore usage is emphasized, JPMorgan pointed to Tether’s relationship with Tornado Cash, a privacy enhancement platform on the Ethereum network, as a reason for such oversight.
OFAC, a unit of the US Treasury Department, had sanctioned Tornado Cash in 2022, claiming it was a significant tool used by malicious actors for money laundering. At that time, Tether stated it would not block Tornado Cash addresses as the company had not yet received such a request from US authorities.
However, in December of the past year, Tether announced that it had frozen stablecoins held in crypto wallets sanctioned by OFAC as a “proactive” security measure and ultimately complied with OFAC’s request.
Tether CEO Comments on Jealousy
Speaking on the matter, Tether CEO Paolo Ardoino suggested that JPMorgan is envious of Tether’s dominant position in the cryptocurrency market, emphasizing the company’s move following the OFC request in December and stating:
“JPMorgan’s current concerns appear to be more about jealousy towards the growth of financial and payment services, which they have ignored for a decade and are now sad to see gaining much attention. If I were in their place, I would be more worried about their total fines of 39 billion dollars.”
Earlier this month, Ardoino had opposed JPMorgan’s statement that the increasing use of Tether was a negative development for the cryptocurrency markets, calling the bank’s stance “hypocritical.”
According to JPMorgan analysts, with the upcoming stablecoin regulations, the use of Tether will decrease significantly. The analysts also suggested that regulations in Europe could create additional pressure on Tether and predicted challenges in the DeFi space in the coming periods.
