USDT issuer Tether Holdings Ltd is allegedly under investigation in the United States per a report from the Wall Street Journal
U.S. investigators are investigating Tether, the company behind the world’s largest stablecoin, USDT. On Friday, the Wall Street Journal (WSJ) reported that the probe centers around possible Anti-Money Laundering (AML) regulations and sanctions violations.
The Nature of the Investigation
The investigation, led by the Manhattan U.S. attorney’s office, explores whether third parties use Tether’s USDT for illegal activities. These activities include terrorism financing, drug trafficking, and hacking.
Reportedly, the U.S. Treasury Department is also contemplating sanctions against Tether. This hinges on the alleged connections with individuals and groups already sanctioned by the U.S., including terrorist organizations like Hamas and various actors in Russia.
Notably, if the Treasury Office imposes sanctions, it would mainly restrict American businesses from dealing with Tether. This will impact the firm, which boasts of firms like Cantor Fitzgerald as its allies.
In all, as stablecoin continues to gain traction in the financial ecosystem, this investigation’s implications could have far-reaching effects.
Tether CEO Responds to Alleged Probe
In the wake of the WSJ report, Tether’s CEO, Paolo Ardoino, took to social media platform X to vehemently deny the allegations.
As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.
— Paolo Ardoino 🤖🍐 (@paoloardoino) October 25, 2024
He dismissed the report as old noise and insisted that there was no evidence of Tether being under investigation. Ardoino’s comments show the strain between Tether’s leadership and regulators.
For a long time, US regulators have scrutinized Tether’s stablecoin. In the past, the U.S. Commodity Futures Trading Commission (CFTC) accused Tether of misleading statements regarding the backing of its stablecoin.
As news of the investigation broke, digital asset prices reacted immediately. Bitcoin (BTC), which had been inching toward the $69,000 mark, sharply declined. The crypto asset dropped to around $66,500 before making a modest recovery.
According to CoinMarketCap data, Bitcoin is currently priced at $67,054.43, down 0.99% in the last 24 hours. This volatility highlights how sensitive the crypto market is to regulatory changes. Regulatory developments can greatly affect investor confidence and market stability.
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