WSJ Reports Tether Investigation Is Underway Despite CEO Claiming Otherwise

The Wall Street Journal (WSJ) reports that the U.S. Department of Justice and the Treasury Department have initiated an investigation into Tether, the company behind the largest stablecoin, USDT. The investigation focuses on allegations that Tether violated anti-money laundering laws and may have allowed sanctioned individuals or entities to evade restrictions.

In an effort to work alongside regulatory authorities, Tether recently took a big step to improve safety by introducing a new policy on wallet freezing, after which over 40 wallets were frozen on the basis of suspected fraudulent activity.

Rising Concerns

The inquiry, led by the Southern District of New York, is examining whether third parties exploited USDT for illicit activities or money laundering. This investigation has reportedly been ongoing for several years, aiming to determine if the widespread use of USDT helped facilitate illegal financial transactions.

Additionally, the Treasury Department is looking into whether Tether was involved in circumventing international sanctions. There are concerns that banned groups, like Hamas and Russian arms dealers, could use USDT token in financial operations, given its status as a digital dollar in global markets. The Wall Street Journal highlights that USDT trades approximately $190 billion daily.

More Than Meets The Eye

In response to the investigation, Tether CEO, Paolo Ardoino, dismissed the allegations as outdated, claiming that Tether is not currently under investigation and outright blaming The Wall Street Journal for spreading misinformation. He stated that there is currently no indication of any direct action against Tether.

Despite his reassurances, the news negatively impacted the cryptocurrency market, causing Bitcoin (BTC) to drop over 2% and Ethereum (ETH) to briefly fall below $2,400 before recovering some losses. It remains unclear as to who is telling the truth, but admittedly this is not the first time that Tether has been the subject of controversy. 

The Wall Street Journal (WSJ) reports that the U.S. Department of Justice and the Treasury Department have initiated an investigation into Tether, the company behind the largest stablecoin, USDT. The investigation focuses on allegations that Tether violated anti-money laundering laws and may have allowed sanctioned individuals or entities to evade restrictions.

In an effort to work alongside regulatory authorities, Tether recently took a big step to improve safety by introducing a new policy on wallet freezing, after which over 40 wallets were frozen on the basis of suspected fraudulent activity.

Rising Concerns

The inquiry, led by the Southern District of New York, is examining whether third parties exploited USDT for illicit activities or money laundering. This investigation has reportedly been ongoing for several years, aiming to determine if the widespread use of USDT helped facilitate illegal financial transactions.

Additionally, the Treasury Department is looking into whether Tether was involved in circumventing international sanctions. There are concerns that banned groups, like Hamas and Russian arms dealers, could use USDT token in financial operations, given its status as a digital dollar in global markets. The Wall Street Journal highlights that USDT trades approximately $190 billion daily.

More Than Meets The Eye

In response to the investigation, Tether CEO, Paolo Ardoino, dismissed the allegations as outdated, claiming that Tether is not currently under investigation and outright blaming The Wall Street Journal for spreading misinformation. He stated that there is currently no indication of any direct action against Tether.

Despite his reassurances, the news negatively impacted the cryptocurrency market, causing Bitcoin (BTC) to drop over 2% and Ethereum (ETH) to briefly fall below $2,400 before recovering some losses. It remains unclear as to who is telling the truth, but admittedly this is not the first time that Tether has been the subject of controversy.