A WSJ report claiming Tether is under years long investigation by federal authorities has caused crypto prices to drop.
A Wall Street Journal exclusive has stated that Tether is under investigation by federal authorities in the US for aiding money laundering and criminal financing. While it mentions no particular source other than “people familiar with the matter,” the WSJ report rattled the crypto markets as numerous assets have now entered the red territory.
The report claims that the US Attorneys’ Office for the Southern District of New York—the Justice Department—is in the process of criminal investigations against Tether. This investigation has been looking into third parties using the firm’s USDT stablecoin to fund criminal activity and launder their proceeds for “several years.”
Tether could also face the possibility of being sanctioned by the Justice Department since USDT witnesses “widespread use by individuals and groups sanctioned by the US, including the terrorist group Hamas and Russian arms dealers.”
Tether Claps Back
Tether issued a response to WSJ, which is quoted in the article as saying, “To suggest that Tether is somehow involved in aiding criminal actors or sidestepping sanctions is outrageous.” The firm also took to its website to issue a statement.
“It is wildly irresponsible for WSJ to write articles with reckless allegations with such certainty when no authorities have gone on the record to confirm these rumors, and no sources are named.” It added, “These stories are based on pure rank speculation despite Tether confirming that it has no knowledge of any such investigations into the company.” Tether also accused the WSJ of “glossing over” its efforts to collaborate with law enforcement to fight criminal activity and seize funds related to crime.
In an X post, Tether CEO Paolo Ardoino slammed the WSJ, mentioning, “As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”
However, there could be reason to believe the newspaper’s claims. Tether was sued by the CFTC a few years ago, requiring the firm and the Bitfinex exchange to settle for over $40 million. The agency went after these crypto firms for violating a previous order and the Commodities Exchange Act.
The SEC also previously replied to a Freedom of Information Act request by saying it has over 44,885 pages of record on Deltec Bank, a Caribbean bank that Tether relies on for banking.
