U.S. Investigation into Tether

U.S. investigators are probing Tether, the company behind the world's largest stablecoin, over potential violations of anti-money laundering rules and sanctions, according to The Wall Street Journal.

Investigation Details

The investigation looks into whether Tether's cryptocurrency is being used by third parties for illegal activities such as terrorism, drug trading, and hacking. This report cites sources familiar with the matter.

Authorities Involved

The Manhattan U.S. attorney's office is conducting a criminal investigation, while the Treasury Department considers sanctioning Tether for its stablecoin's use by U.S.-sanctioned individuals and groups, including Hamas and various rogue entities in Russia. If sanctions are imposed, it would primarily restrict American businesses from interacting with Tether.

Responses from Tether

Tether CEO Paolo Ardoino pushed back against the WSJ's report on social media, declaring that there are no indications Tether is under investigation and accusing the WSJ of regurgitating misinformation. A Tether spokesperson labeled the WSJ article as based on “pure rank speculation,” emphasizing Tether's proactive cooperation with law enforcement to combat illicit activities.

Historical Scrutiny

Tether has faced criticism over its stablecoin, which is pegged to the U.S. dollar. The U.S. Commodity Futures Trading Commission has stated that Tether made misleading statements about the stablecoin being fully backed by U.S. dollars. Lawmakers have also called for investigations regarding Tether's possible involvement in illicit finance. Tether asserts it is working with global law enforcement to prevent illegal activities.

Update: Oct. 25, 7:30 p.m. UTC to include comments from a Tether spokesperson.