US wants to investigate Tether for allegedly violating money laundering and sanctions regulations
A representative of stablecoin company Tether has denied the allegations from US authorities, claiming no wrongdoing.
According to the Wall Street Journal, US federal investigators are considering prosecuting Tether (USDT) for allegedly violating financial sanctions, as well as anti-money laundering regulations.
Specifically, prosecutors at the Manhattan District Attorney's Office (New York, USA) under the US Department of Justice are collecting evidence on the possibility that Tether has been exploited by third parties to serve criminal activities such as drug trafficking, terrorism financing and cyber attacks, as well as laundering money from those acts.
DOJ is investigating cryptocurrency company Tether for possible violations of sanctions and AML rules
The Treasury, meanwhile, has been considering sanctioning Tether because of its widespread use by individuals and groups sanctioned by the UShttps://t.co/yFOxThltQd
— db (@tier10k) October 25, 2024
Meanwhile, the US Treasury is considering sanctioning Tether for its widespread use by individuals and groups sanctioned by the US, such as the terrorist group Hamas and a Russian arms dealer.
Tether CEO Paolo Ardoino has denied the Wall Street Journal article on social media X, insisting that his company is not under investigation.
As we told WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.
— Paolo Ardoino 🤖🍐 (@paoloardoino) October 25, 2024
In the past, Tether has cooperated with US authorities many times to crack down on criminal activities, leading to the freezing of assets worth hundreds of millions of USD in December 2023. However, in 2021, the company was fined a total of $61 million by the Commodity Futures Trading Commission (CFTC) and the New York state government for violations in the USDT stablecoin collateralization work.
The information that Tether is being investigated appeared in the context of the stablecoin company being rumored to be about to enter the traditional financial market to expand its business, after a very successful first half of 2024 with a record profit of $5.2 billion thanks to the investment strategy in US Treasury bills, making the company the 18th largest holder of US Treasury bills in the world.
USDT's capitalization has recently surpassed the $120 billion mark, helping the cryptocurrency market recover strongly in recent times.
Bitcoin prices have reacted quickly to the latest developments mentioned above. The world's largest cryptocurrency fell from $67,280 to $66,000 when the Wall Street Journal article was spread, then quickly recovered to its old price range when Tether CEO spoke out to deny it.
The USDC/USDT trading pair on Binance is still slightly depegging due to news that Tether may be investigated by the US government.
