Regulatory oversight increases the risk of censoring endpoints of the stablecoin's network (such as the issuer, banks and custodians) as well as users. A score of 0 indicates a high degree of government censorship risk.
USDT’s issuer, Tether, is registered with the US FinCEN as a money service business. As an entity registered in the British Virgin Islands (BVI) with primarily BVI-registered banking partners, USDT is less prone to censorship at the associate-level than USDC and other US-registered / regulated stablecoin issuers. However, Tether actively cooperates with US authorities for blacklisting users suspected of money-laundering or criminal activities.
Note: Censorship resistance is not a key objective common to all stablecoins. Consequently, a low score may not be a relevant source of concern to some types of stablecoin users. Furthermore, regulatory oversight can also be beneficial to some users as it entails more robust consumer protection mechanisms and increased transparency.