The world of virtual currency is haunted by ghosts. That’s the specter of a federal investigation into stablecoin giant Tether, which supports trillions of dollars of transactions. A report in the Wall Street Journal, citing unnamed sources, claims that Manhattan prosecutors are scrutinizing Tether for possible sanctions violations and money laundering, and that the truth or FUD (Fear, Uncertainty) This raises the disturbing question of whether or not this is the case.
A bombshell article in the Wall Street Journal reported that prosecutors are investigating whether third parties have used Tether to fund illegal activities such as drug trafficking, terrorism and hacking. The Treasury Department is reportedly considering sanctions against Tether due to its suspected use by sanctioned individuals and entities, including Hamas and Russian arms dealers. Such sanctions would effectively bar Americans from interacting with the company.
But Tether quickly and forcefully denied it. CEO Paolo Ardoino dismissed the report via an
The investigation into the allegations comes at a critical juncture for the stablecoin market. Tether’s USDt is the most traded cryptocurrency in the world and serves as an important liquidity tool for exchanges and traders. Its stability, pegged to the US dollar, makes it a popular choice for those looking to escape the volatility of other cryptocurrencies.
However, Tether has long been dogged by controversy and skepticism regarding the composition and suitability of its reserves. The company has stepped up its transparency efforts, but questions remain about its support. If confirmed, the federal investigation could further erode trust in stablecoins and destabilize the broader cryptocurrency market.
In February 2021, Bitfinex and Tether reached an $18.5 million settlement with the New York Attorney General’s Office, resolving allegations that they concealed mixed losses of customer and corporate funds. Investigation revealed that Tether, a company owned by Bitfinex, misrepresented the reserves backing its USDT stablecoin and claimed it was fully backed when this was not necessarily the case. did. As part of the settlement, Bitfinex and Tether were required to submit quarterly disclosures about their reserves for two years and were prohibited from providing services to customers in New York. They neither admitted nor denied the charges.
New York State Attorney General Letitia James declared in a statement:
“Bitfinex and Tether recklessly and illegally concealed massive financial losses in order to continue their plans and protect their profits. Tether’s insistence that its cryptocurrencies were always fully backed in US dollars. was a lie. These companies obscured the real risks facing investors and were operated by unauthorized and unregulated individuals and entities trading in the darkest corners of the financial system. ”
The potential impact of the allegations against Tether is significant. Even if the company is not formally investigated or ultimately cleared of wrongdoing, the mere existence of these allegations could erode trust in the stablecoin giant.
This could potentially trigger a sell-off of USDt and other stablecoins, impacting the broader crypto market. If a formal investigation is launched and Tether is found to have violated sanctions or facilitated money laundering, the impact could range from hefty fines to criminal charges, disrupting operations and disrupting the entire cryptocurrency ecosystem. There is a possibility that ripples of instability will spread.
Given Tether’s dominance as the most traded stablecoin and its important role in providing liquidity, any disruption or even the recognition of potential fraud could have far-reaching implications. there is.
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Yona has no cryptocurrency positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is the official media and publication of the Shiba Inu Cryptocurrency Project. Readers are encouraged to conduct their own research and consult a qualified financial advisor before making any investment decisions.
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