Tether is under investigation by the United States for suspected sanctions violations and money laundering activities, the WSJ reported. The report states that the U.S. Treasury Department may impose sanctions on Tether due to its use by sanctioned entities such as Hamas and Russian arms dealers. Tether CEO Paolo Ardoino refuted the claims, maintained close cooperation with law enforcement, and refuted the false allegations. Despite the controversy surrounding the transparency of its reserves, Tether maintains that it fully supports its stablecoin, even though it has not been formally audited.
According to a recent report in the Wall Street Journal, Tether is under investigation by US authorities. The Journal reported, citing sources close to the matter, that the U.S. federal government is investigating Tether’s operations for “possible violations of sanctions and anti-money laundering regulations.”
The report claims that authorities are investigating whether Tether’s stablecoin USDT was used for drug trafficking, terrorism, cybercrime, and money laundering.
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The report said Tether could also face serious repercussions, including sanctions from the US Treasury over the alleged frequent use of USDT by sanctioned groups such as Hamas and Russian arms dealers.
CEO calls out ‘old noise’ report despite signs of ongoing investigation
Tether CEO Paolo Ardoino strongly denied there was any truth to the allegations, saying, “WSJ is regurgitating old noise.” Full stop. ”
Ardoino went to Platform X to dispel FUD and said the stablecoin issuer regularly cooperates with law enforcement agencies.
At Tether, we regularly work directly with law enforcement authorities to prevent the misuse of USDt by rogue states, terrorists, and criminals. We can tell if we are being investigated, as the article falsely claims.
Paolo Ardoino Tether CEO
And since Tether has not received any notification, he added, “we can confirm that the claims in the article are demonstrably false.”
At the Plan B Forum conference in Lugano, Switzerland, the CEO confirmed that Tether holds 82,454 Bitcoin and 48.3 tons of gold in reserves.
Tether promises transparency on its website, claiming that “all Tether tokens are pegged 1:1 to the corresponding fiat currency and are 100% backed by Tether’s reserves.”
However, controversy has persisted for years over Tether, its reserves, and the potential use of USDT in nefarious activities.
In March 2024, Bloomberg reported that US and UK authorities made US$20 billion worth of trades on Garantex, a Russian cryptocurrency exchange that has been sanctioned by the US and UK for its alleged involvement in “financial crimes and illegal transactions in Russia.” It was reported that he was gone.
Tether says the reserves are fine, believe me, brother.
And there is also the issue of USDT reserves. Although Tether has always promised transparency, it has never submitted an independent audit report. Tether says this is difficult to audit because the Big Four accounting firms are reluctant to engage with Tether.
Currently, BDO Italia is margining Tether, but this is just a certification and not a full-fledged audit.
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USDT is the third largest cryptocurrency by market capitalization, with US$120 billion (A$181.6 billion). Hilary Allen, a law professor at American University, told Bloomberg that Tether’s failure could derail the entire crypto industry.
If Tether went to zero tomorrow, it would be disastrous for the crypto economy.
Hilary Allen, American University Law Professor
Based on a scale of 1 to 5, 5 means weak. Tether received a rather somber rating in the 2023 S&P Global Stablecoin Stability Rating with a score of 4 called “Constrained.”
