On Friday, the Wall Street Journal broke news of a new US government investigation into Tether. Anonymous sources familiar with the Manhattan U.S. Attorney’s Office said law enforcement leaders were “investigating whether the virtual currency is being used by third parties to fund illegal activities.”
This announcement marks the next chapter in Tether’s legal saga. In 2012, a lawsuit against Bitcoinica began. Bitcoinica’s source code was used by Tether’s sister company, Bitfinex.
Legal issues would impact Tether every year since then.
Tether (USDT), the world’s largest stablecoin, attracts criminals who find its anonymity, chargeback resistance, and widely accepted characteristics useful. Although most uses of USDT are harmless, its illegal uses are harmful.
To track Tether’s conflicts with the US government over time, Protos created a graph of some key US government actions involving the stablecoin giant. Please note that this table only includes U.S. government actions and excludes numerous civil lawsuits and criminal investigations around the world.
Click to enlarge.
Read more: FBI details how to launder USDT through Binance
US Government Actions Regarding Tether
September 18, 2015 Bitfinex commented on the Commodity Futures Trading Commission (CFTC) investigation. USDT Market Cap: $451,000. On June 2, 2016, Bitfinex settled CFTC claims that it illegally traded customers’ Bitcoin. USDT market cap: $2.9 million. On July 21, 2016, Trendon Shavers, the operator of the Ponzi scheme promoted by Bitfinex founder Rafael Nicol, will be sentenced to prison. USDT market cap: $6.9 million. On September 14, 2017, Tether admitted to the New York State Attorney General’s Office (NYAG) that it has not had a bank account with more than $61.5 million in cash since April 2017. USDT market capitalization: $418 million. May 24, 2018 The Department of Justice (DoJ) and CFTC begin a criminal investigation into USDT-based Bitcoin price manipulation. USDT market capitalization: $2.5 billion. April 25, 2019 NYAG requests documents from Tether. USDT market capitalization: $2 billion. On May 1, 2019, federal prosecutors in Arizona charged “shadow banker” Reginald Fowler with fraudulently moving Tether funds. USDT market capitalization: $2 billion. On May 5, 2019, the U.S. Attorney for the Southern District of New York (SDNY) indicted Mr. Fowler and Mr. Rabid Yosef for criminal misappropriation of Tether’s reserves. USDT market capitalization: $2 billion. On October 25, 2019, Ivan Manuel Molina Lee was arrested on charges of money laundering through Bitfinex. USDT market capitalization: $4.2 billion. September 24, 2020 US attorney charges cartel members with using USDT for bribes. USDT market capitalization: $15.2 billion. February 23, 2021 Bitfinex pays $18.5 million to settle NYAG’s claims that it concealed significant financial losses. USDT market capitalization: $34.7 billion. July 26, 2021 The Department of Justice investigates allegations of bank fraud by Tether executives. USDT market capitalization: $62 billion. July 27, 2021 U.S. President’s Financial Markets Task Force discusses Tether. USDT market capitalization: $62.2 billion. October 15, 2021 CFTC fines Tether $41 million for false claims regarding U.S. dollar reserves. USDT market capitalization: $70 billion. December 8, 2021 A US senator condemns Tether executives for not attending a Senate hearing. USDT market capitalization: $77 billion. February 8, 2022 Ilya Lichtenstein and Heather Morgan were arrested on charges of stealing funds from Bitfinex. USDT market capitalization: $78 billion. August 3, 2022 Boston federal prosecutors seize $73,586 in USDT proceeds of crime. USDT market capitalization: $66 billion. December 15, 2023 Tether confirms that it has responded to requests for information from the Department of Justice, IRS, and Secret Service. USDT market capitalization: $90.8 billion. October 25, 2024 U.S. Attorney in Manhattan is investigating Tether. USDT market capitalization: $120 billion.
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