WSJ Tether Report Draws Strong Criticism From Company

Key Points:

• Cryptocurrencies declined after the WSJ Tether report announced investigations against the company due to its ties to sanctioned individuals.
• Tether strongly denied the allegations and criticized the WSJ for publishing unverified claims.

Cryptocurrencies took a nosedive following a Wall Street Journal report that the US Treasury Department is considering imposing sanctions against Tether, one of the world’s largest stablecoin issuers.

Read more: Tether Transparency Problems Are Coming Under Heavy Criticism

Stablecoin Issuer Reacts to WSJ Tether Report

WSJ Tether report sourced from allegations on firm’s link to sanctioned individuals, groups and ongoing bank fraud investigation against its backers.

Tether has been at the center of several investigations over the years, all of which it vigorously denies. The company used the opportunity to point out that it was not aware of any probe involving itself.

“It is wildly irresponsible for WSJ to write articles with reckless allegations with such certainty when no authorities have gone on the record to confirm these rumors, and no sources are named,” the company said via a statement.

The stablecoin issuer also added that the WSJ Tether report completely omits to mention the fact that the firm has proactively engaged with law enforcement to combat the misuse of its stablecoin, which a wide range of critics, from the United Nations to consumer protection organizations, have loudly condemned.

Regulatory Challenges: Tether to Remain Under Pressure

Stablecoins, like USDT, constitute an important component in the cryptocurrency ecosystem because they offer smooth translation of fiat money into cryptocurrencies such as Bitcoin. They also constitute important collateral in crypto lending, underlining their role in facilitating market transactions.

This is not the first time that Tether has had its regulatory issues. In October of 2021, the Commodity Futures Trading Commission levied a combined $42.5 million fine against Tether and its affiliated exchange, Bitfinex, over violations of the Commodity Exchange Act and a prior CFTC order.