The U.S. federal government is investigating stablecoin issuer Tether, the Wall Street Journal reported in an “exclusive” article dated October 25, citing “people familiar with the matter.” Tether CEO Paolo Ardoino called the story “old noise” but it shocked the crypto market.
Are the Department of Justice and Treasury considering Tether?
According to the newspaper, the U.S. Attorney’s Office for the Southern District of New York, or the Department of Justice, is conducting a criminal investigation into the use of Tether (USDT) by third parties to fund illegal activities or launder money for illegal activities. It is said that it is. those activities. The investigation has been ongoing for “several years.”
At the same time, the paper continued, the Treasury Department is considering sanctioning Tether for its “widespread use by U.S.-sanctioned individuals and entities, including the terrorist organization Hamas and Russian arms dealers.”
The Wall Street Journal estimated that up to $190 billion of USDT is traded every day.
The paper quoted Tether’s response as saying, “It is outrageous to suggest that Tether is in any way involved in aiding or abetting criminals or evading sanctions.” Tether further states on its website:
“It would be irresponsible of the Journal to write an article with such credibly reckless claims when the authorities have no records to confirm these rumors and the names of the sources have not been disclosed. ”
“The article also carelessly exaggerates that Tether has had extensive, well-documented dealings with law enforcement to crack down on bad actors who seek to exploit Tether and other cryptocurrencies. ” Tether’s statement continued.
Tether CEO Paolo Ardoino also denied the allegations. He said in his post:
“As we told WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”
Source: Paolo Ardoino
Related: Tether’s USDT hits record $120 billion market cap, flashes “Uptober” signal
What the record shows
Tether is regularly the subject of criticism from sources ranging from the United Nations to nonprofit consumer protection groups. Given current US government policy, claims that Tether is under investigation are not difficult to believe.
Source: Jacob Silverman
Bitfinex, a cryptocurrency exchange affiliated with Tether, was fined a total of $42.5 million by the Commodity Futures Trading Commission (CFTC) in October 2021 for violating the Commodity Exchange Act and prior CFTC orders. .
“It’s clear that the U.S. government is after Tether,” Ripple CEO Brad Garlinghouse said on a podcast in May. He did not elaborate on the source of his insight.
Tether has a documented record of cooperation with law enforcement. The company claimed in August that since its launch in 2014, it has helped more than 145 law enforcement agencies recover more than $108.8 million in USDT related to illegal activities.
Cryptocurrency market reaction
News of the investigation appears to be shaking the broader cryptocurrency market.
Bitcoin (BTC) fell from $67,367 to $66,016 and has only partially recovered at the time of writing. Ether (ETH) fell from $2,505 to $2,461. BNB (BNB), Solana (SOL), XRP (XRP) and other major cryptocurrencies showed similar behavior.
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