what’s happening?
According to the Wall Street Journal, the US federal government is reportedly investigating Tether, the issuer of the USDT stablecoin, for possible violations of anti-money laundering and sanctions laws. There is.
Federal investigators, led by the U.S. Attorney’s Office in Manhattan, are investigating whether third parties used Tether to fund illegal activities, as the paper alleges, although no formal charges have been filed. is being investigated.
Source: CoinMarketCap
Following this report, the price of Bitcoin fell from $68,600 to $66,589, and Tether at one point fell to 99.81 cents, as the entire cryptocurrency market reacted to the news.
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However, Tether CEO Paolo Ardoino denied any ongoing investigation, telling X that there is no evidence to suggest Tether is under surveillance.
At Tether, we regularly work directly with law enforcement authorities to prevent the misuse of USDt by rogue states, terrorists, and criminals. We can tell if we are being investigated, as the article falsely claims. Based on that, we can confirm the following claims…
— Paolo Ardoino 🤖🍐 (@paoloardoino) October 25, 2024
Why is tether important?
Tether, the issuer of the stablecoin USDT, offers a digital alternative to the US dollar with a current market capitalization of approximately $120 billion.
USDT ranks as the third largest cryptocurrency by value and is the most frequently traded due to its role as a stand-in for the dollar in crypto markets where traditional currencies are unavailable.
Because stablecoins serve as the primary gateway between fiat currencies and digital assets, an expanding supply of stablecoins often signals potential market upside and suggests increased purchasing power for investors. there is.
Source: Into the Block
Notably, in August, Tether minted $1.3 billion in USDT, shortly after Bitcoin hit a five-month low of around $49,500, reflecting high demand for USDT during the market downturn.
USDT is widely popular, with 330 million on-chain wallets. This estimate does not include the additional millions of people who access USDT via centralized platforms. User growth is accelerating, with each quarter outpacing the previous quarter.
Source: Tether
Stablecoin issuer Tether is reportedly considering lending some of its multibillion-dollar profits to commodity trading companies, which have traditionally relied on banks for credit, according to Bloomberg. It signals the potential for change in the industry.
What’s next for Tether?
According to the Wall Street Journal, the Treasury Department is reportedly considering sanctions against Tether due to its use by sanctioned companies. The publication noted that Tether has been under investigation for several years for alleged bank fraud by backers.
In response, Tether called the article “irresponsible reporting” and said it contained “reckless claims” without verified sources.
The company emphasized that “authorities have no records confirming these rumors,” and said Tether was not aware of any active investigation. Tether also emphasized that it is working with law enforcement agencies to prevent misuse of its token, USDT, and other cryptocurrencies.
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In parallel with the Manhattan investigation, the U.S. Treasury Department is reportedly considering sanctions against Tether due to its widespread use by individuals and entities under U.S. sanctions, according to the Wall Street Journal. There is.
Previous scrutiny has focused on whether Tether has enough assets to support the value of $1 of its tokens. In 2021, federal prosecutors in Washington warned Tether executives of possible charges related to misleading banks used to transfer funds.
The investigation was then transferred to the U.S. Attorney’s Office in Manhattan, but two years passed with no charges or enforcement action brought.
At this time, the U.S. Attorney’s Office has not issued any official statement on this matter.
Despite this news, Tether’s USDT showed resilience and only briefly fell to around 99.69 cents.
