- The U.S. is investigating Tether for potential involvement in illegal activities by third parties.
- Possible sanctions from the U.S. Treasury could impact the company’s future operations.
- The company strongly denies any involvement or current investigations against it.
The U.S. Justice Department is deepening its scrutiny of Tether, a stablecoin issuer valued for its liquidity in the crypto market. According to the WSJ, this probe, led by the U.S. Attorney’s Office in Manhattan, aims to determine if third parties have used the company’s USDt token to facilitate criminal activities like money laundering, hacking, and terrorism financing.
This investigation has reportedly been underway for years, reflecting ongoing concerns about the use of cryptocurrencies in unlawful activities. The Wall Street Journal reports that Tether sees trading volumes reaching $190 billion daily, a scale that has garnered increased attention from U.S. regulators.
While the Justice Department pursues its investigation, the U.S. Treasury Department is also weighing potential sanctions against Tether. This consideration follows findings that Tether may have been used by groups sanctioned by the U.S., including entities linked to Hamas and Russian arms dealers.
Sanctions could severely impact the company’s ability to operate within the U.S., as American users would be prohibited from transacting with the company.
The Treasury’s stance reflects broader concerns within the U.S. about the company’s role in potentially evading international sanctions. The stablecoin issuer, however, has disputed these claims, emphasizing its commitment to compliance with legal and regulatory frameworks.
Tether’s Strong Response to Allegations
The company has denied the existence of any current investigation and criticized the WSJ’s reporting as speculative. The company stated that, contrary to the claims in the article, the company remains committed to regulatory compliance and transparency.
Tether said:
The article also carelessly glosses over Tether’s well-documented and extensive dealings with law enforcement to crack down on bad actors seeking to misuse Tether and other cryptocurrencies.
CEO Paolo Ardoino further clarified that the company is routinely in touch with law enforcement to prevent bad actors from misusing its stablecoin.
In a firm rebuttal, the company condemned the WSJ for “reckless allegations,” highlighting its ongoing partnerships with law enforcement agencies to curtail the misuse of its token. Despite these assurances, the looming threat of sanctions raises questions about the company’s future in the U.S.
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