Executives at USDT issuer Tether are facing a criminal investigation into bank fraud, according to Bloomberg. The company promptly denied the allegations.
Tether executives are reportedly facing an investigation by the U.S. Department of Justice Department of Justice (DOJ) faced. The prosecutors want to take a close look at the company’s past activities with its banking partners, as if from one Bloomberg report emerges. In its article, the news agency mentions three anonymous informants who are familiar with the matter. The DOJ is investigating whether the banks knew about the crypto-based transactions being carried out by Tether.
It is nothing new that the US authorities have Tether on their nerves. After a long legal tug-of-war between the company and the New York Attorney General (NYAG) since April 2019, Tether and the cryptocurrency exchange Bitfinex have reached a settlement deal with NYAG. Both companies fined $ 18.5 million. Even before this deal, Tether announced that it had paid off its remaining $ 550 million loan to Bitfinex in February.
Tether’s market cap is $ 68 billion
The stablecoin USDT issued by Tether is the largest stablecoin in terms of market capitalization. The total number of tokens in circulation is worth over $ 68 billion. This means that Tether also accounts for more than two thirds of the total stablecoins issued. For this reason alone, an investigation by the judicial authorities can have a huge impact on the entire crypto market. Since the court settlement, customers from New York are no longer looked after anyway. Again and again there is speculation about a possible inadequate coverage of USDT. Most recently, however, a test report from the insurance company Moore Cayman confirmed that the Tether tokens are fully secured.
But what exactly is the current DOJ investigation about? The report said the focus was on the early stages of stablecoin, which was launched in 2014. There is probably a suspicion that Tether was hiding from the banks that the transactions in question were related to crypto assets, according to the three insiders mentioned. The USDT inventor let with an opinion Don’t wait long for the Bloomberg article. The report is seen as an attempt at a baseless FUD campaign.
This article follows the pattern of repackaging stale claims as “news”. Continued efforts to discredit Tether will not change our determination to remain community leaders.
Tether statement on Bloomberg report
The company will continue to work cooperatively with the authorities and keep its commitment to transparency towards customers.