The Wall Street Journal (WSJ) reported that the cryptocurrency company Tether is being investigated by the US government, but Tether executives deny these claims.
The WSJ alleges that the stablecoin Tether (USDT) and its owners are under investigation for suspected illegal activities and sanctions against entities. If these claims are true, they would include allowing Tether to be used for drug trafficking, money laundering, and terrorist financing.
If these claims are valid, then Tether allowed its coins to be used for illegal activities and either knew about these activities or had safeguards in place to adequately prevent them. This means that he did not take the class.
Stablecoins like Tether fall under the decentralized currency classification, even though they are associated with fiscal currencies. For Tether, that would be USD. As a decentralized currency, there is a lot of freedom in how the coins are used, and very little responsibility when it comes to determining who uses the coins and what they do with them. The freedom and anonymity of cryptocurrencies also make them attractive to criminals who do not want their actions or identities revealed.
Tether in case of trouble
Tethercoin is a major stablecoin and the third most traded cryptocurrency coin after Bitcoin (BTC) and Ethereum (ETH). According to the Wall Street Journal, the U.S. Attorney’s Office is investigating stablecoins for signs that they have intentionally or unintentionally allowed illegal activity.
Tether’s CEO said there was no investigation, and the WSJ issued a statement regarding X saying they were just repeating old claims and had no evidence to support them.
It is understood that federal prosecutors were investigating Tether providers for possible involvement in Russian arms deals. There was also talk from the Treasury Department that US citizens should not be allowed to buy or sell USDT. There continue to be concerns about the safety of using Tether and how it could compromise the U.S. government’s ability to defend itself.
In response to these past allegations, Tether has frozen numerous wallets and put in place safeguards to prevent illegal activity. But for now, it’s unclear whether Tether is still under investigation or whether the Journal is simply reporting old news.
