Tether CEO Paolo Ardoino has refuted a report in the Wall Street Journal that US federal authorities are investigating the company for possible money laundering.
WSJ today published an exclusive report claiming that the U.S. Attorney’s Office in Manhattan is investigating stablecoin providers. Potential charges center on whether third parties used Tether’s platform to facilitate illegal activities such as drug trafficking, terrorist financing, and hacking, or to disguise the proceeds of such crimes. It is said that it is.
WSJ accusations against Tether cause temporary market turmoil
Immediately after the WSJ report, Ardoino said Tether had not observed any signs of a federal investigation. However, the publication cited anonymous sources who suggested that law enforcement authorities are looking into whether stablecoins were indirectly supporting sanctioned companies.
More specifically, it is investigating whether stablecoins have enabled organizations such as Russian arms dealers and Hamas to secretly move funds.
“As we told WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating the same old noise. A complete stop,” Paolo Ardoino wrote.
This report caused sharp volatility in the cryptocurrency market. Bitcoin, which had been approaching the $70,000 threshold, fell sharply from $67,000 to $65,000 on the news. However, Ardoino’s quick denial stabilized the market and the price of Bitcoin recovered to around $66,700.
Read more: A guide to the best stablecoins of 2024
Bitcoin price fluctuations on October 25th. Source: BeInCrypto
Tether has faced increased criticism and scrutiny from various quarters in recent months. In September, consumer advocacy group Consumers Research released a report accusing Tether of a continued lack of transparency.
The report criticized the company for failing to fully audit its dollar reserves as promised in 2017. Consumers Research raised concerns about Tether’s possible involvement in circumventing international sanctions, particularly in countries such as Venezuela and Russia.
The report even compares Tether’s operational practices to FTX, raising concerns about the stablecoin issuer’s business model and regulatory compliance.
Despite this continued research, stablecoin issuers are keeping an eye on several developments in the coming year. Recent reports also suggest that Tether is considering entering the commodities space. If successful, the company could benefit from a credit-hungry business.
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