October 26, 2024 – (New York) The US federal government has reportedly opened an investigation into Tether, the major stablecoin issuer, amid concerns over its potential involvement in financing illicit activities. According to an exclusive report from The Wall Street Journal On October 25, the Justice Department and Treasury Department are reviewing Tether’s operations, which have come under scrutiny due to their widespread use in transactions linked to sanctioned individuals and groups, notably Hamas and Russian arms dealers.
The investigation, led by the U.S. Attorney’s Office for the Southern District of New York, focuses on the potential use of Tether’s USDT for money laundering and other criminal activities. This investigation has reportedly been underway for several years. Tether CEO Paolo Ardoino called the news “old noise” and expressed outrage at the implications, saying the article falsely suggests Tether supports criminal enterprises.
Tether’s daily trading volume is estimated at $190 billion, highlighting its importance in the cryptocurrency ecosystem. In response to the allegations, Tether released a statement condemning the Wall Street Journal for its “reckless” reporting, highlighting the company’s efforts to work with law enforcement to combat the misuse of its stablecoin.
The investigation had a notable impact on the cryptocurrency market, with Bitcoin falling from $67,367 to $66,016, while Ethereum fell from $2,505 to $2,461. Other major cryptocurrencies, including BNB and Solana, also saw declines.
This investigation adds to Tether’s history of regulatory oversight, including a $42.5 million fine imposed by the Commodity Futures Trading Commission (CFTC) in 2021 for violations of trading regulations. Industry experts, including Ripple CEO Brad Garlinghouse, have noted the increasing pressure placed on Tether by US authorities.
