According to the report, US federal authorities are currently investigating stablecoin issuer Tether USDT/USD for possible violations of US sanctions and anti-money laundering regulations.
What Happened: This investigation, conducted by the Manhattan U.S. Attorney’s Office, investigated the potential misuse of Tether’s stablecoin in activities such as drug trafficking, terrorist financing, and laundering the proceeds of these illegal activities. The Wall Street Journal reported that.
Tether CEO Paolo Ardoino did not respond to questions from Benzinga, but he called the WSJ report a regurgitation of old noise.
“As we told WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop,” he said on Twitter.
In a statement to Benzinga, Consumers Research executive director Will Hild said the development underscores what Consumers Research has been advocating for months.
“We have worked hard to educate consumers about Tether’s record of shady practices and refusal to be transparent, and we are proud that our warnings have been heeded. “Today’s news makes it even more concerning that Tether has not been audited by a reputable accounting firm.” said Hild.
According to reports, the Treasury Department is also reportedly considering imposing sanctions on Tether.
This surveillance emerged in response to the use of stablecoins by sanctioned groups, including Russia and certain entities in the Middle East.
Sanctions against Tether would restrict U.S. companies from doing business with the organization.
Tether’s stability tied to the dollar peg has expanded its role in global financial transactions, especially in regions with limited access to U.S. currency.
With daily trading volume reaching nearly $190 billion, Tether has become an important tool for transactions in high-risk areas related to national security concerns, such as organized crime and arms trafficking.
Also read: Polymarket CEO Shayne Coplan defends platform, calls platform ‘reality check’ amid heightened surveillance
This role establishes Tether as a key player in the Treasury market, where the company currently holds $81 billion in Treasury bills, and sees the move as bridging crypto and traditional finance. There are some people.
Tether’s management even claims that these holdings support broader financial stability, but skeptics, including experts at the Peterson Institute, argue that Tether’s presence is The company warns that it is small compared to major financial companies.
Former House Speaker Paul Ryan has suggested that stablecoins like Tether could help deal with future U.S. debt problems, but he has also suggested that stablecoins like Tether could help address future U.S. debt problems, but are not likely to be used by multitrillion-dollar money market funds or major players like Berkshire Hathaway. Compared to asset owners, the broader impact of these holdings remains small.
The Justice Department’s investigation into Tether is not new. Previous investigations have investigated whether certain backers engaged in bank fraud to gain access to the international financial system.
In response to the recent allegations, Tether has strongly denied any connection to illegal activity and said it has always cooperated with U.S. and international law enforcement agencies to curb the criminal use of cryptocurrencies.
What’s next: The evolving role of stablecoins like Tether in both digital assets and traditional financial markets will be among the key discussions at Benzinga’s Future of Digital Assets event on November 19th. That’s the point.
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