Tether is under investigation for alleged illegal activities and ties to sanctioned entities. Despite the intense scrutiny, Tether is exploring growth opportunities in the commodity space.
This year, stablecoins have emerged as a transformative force in the crypto world, particularly highlighted by the competition between Circle’s USDC and Tether’s USDT.
Visa’s on-chain analysis further showed that USDT recorded a trading volume of $6.47 billion, significantly higher than USDC’s $2.08 billion as of October 27th.
Source: Visa On-Chain Analytics
Is Tether under threat?
As USDT’s popularity grows, The Wall Street Journal reports that the U.S. Attorney’s Office in Manhattan is investigating USDT’s possible involvement in illegal activities such as drug trafficking, terrorist financing, and money laundering. It was reported that
But things took a different turn when Tether’s CEO claimed there was no sign of a federal investigation.
Regarding X, Tether CEO Paolo Ardoino said:
“As we told WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”
Mr. Tether echoed this sentiment, arguing:
“These stories are based on pure ranking speculation, even though Tether has confirmed that it has no knowledge of any such investigation into the company.”
They added:
“The article also inadvertently glosses over Tether’s well-documented and extensive dealings with law enforcement to crack down on bad actors who seek to exploit Tether and other cryptocurrencies. .”
But the Journal took a firm stance, suggesting that law enforcement authorities are looking into whether stablecoins inadvertently facilitated transactions for sanctioned companies.
What’s going on with Tether?
For those of you who don’t know, U.S. prosecutors were investigating stablecoin providers for their alleged involvement in illegal activities, particularly related to sanctioned groups such as Russian arms dealers.
Additionally, the Treasury Department was considering sanctions that would bar U.S. citizens from trading in USDT, which trades at a staggering $190 billion a day. Stablecoins have come under increased scrutiny due to concerns about Tether’s links to national security issues, including North Korea’s nuclear ambitions and ties to Mexican drug cartels.
In light of these accusations, Tether categorically denies any wrongdoing and emphasizes its commitment to cooperate with law enforcement and recent compliance efforts. This included freezing 1,850 wallets and hiring experts to strengthen the regulatory framework.
What more is there?
The study compared Tether’s operational practices to FTX’s. This raises further doubts about its business model and regulatory compliance. The report also indicates that USDT may have allowed users in countries such as Venezuela and Russia to circumvent sanctions. This has raised alarms about the potential misuse of USDT by state-owned enterprises and criminal organizations.
Despite continued scrutiny over its operations, USDT was actively pursuing several strategic developments for the coming year.
Recent reports suggest that stablecoin issuers are considering entering the commodity space, which could present significant growth opportunities.
If the venture is successful, USDT could potentially gain capital from a credit-hungry business. This could position Tether as a major player in a new market while also strengthening its revenue stream.
Next: Is XRP ready for a breakout? Increased activity, strong indicator signals…
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