By Sam Boughedda
According to a Wall Street Journal report on Friday, the cryptocurrency firms behind used forged documents and shell companies to obtain bank accounts.
According to the report, documents show that in late 2018, the companies behind Tether struggled to maintain access to the global banking system, leading some of their backers to turn to “intermediaries shadows, falsified documents and fictitious companies to come back to it.”
In an email from Stephen Moore, one of the owners of Tether Holdings Ltd, seen by the WSJ, it is revealed that one of the intermediaries, a major tether trader in China, was trying to circumvent the banking system by “providing fake sales receipts and fake contracts for every deposit and withdrawal.”
Tether, which WSJ sources say has been investigated by the US Department of Justice, runs tether, a $71 billion stablecoin, and a sister company runs Bitfinex, one of the largest major crypto exchanges.
The WSJ says Moore recommended that they drop their efforts to open the accounts because it was too risky to continue using the fake sales receipts and contracts he had signed.
The publication adds that it has seen and reviewed a cache of emails and documents demonstrating a long-running effort by crypto firms to stay connected to the financial system. Had they lost access to the banking system, it would have posed “an existential threat”, the companies allegedly said in a lawsuit.
In addition, companies frequently hid their identity behind other companies or individuals, which sometimes caused problems. Those issues included “hundreds of millions of dollars in seized assets and ties to a designated terrorist organization,” according to the WSJ.