Rumors have been circulating that Tether may be the subject of a federal investigation.
The Wall Street Journal is alleging that the US government is investigating Tether. In an article published last week, citing unnamed sources, the Journal reported that federal investigators in Manhattan are looking into alleged anti-money laundering violations and whether illicit actors have used the cryptocurrency to fund illegal activities.
Tether categorically denies the allegations.
“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,” a Tether spokesperson said in a statement on Friday. “These stories are based on pure rank speculation despite Tether confirming that it has no knowledge of any such investigations into the company.”
Read more: Lummis, Hill push for ‘swift’ DOJ action against Binance, Tether
The report comes months after conservative nonprofit Consumers’ Research launched a campaign against Tether, alleging the stablecoin is “used by the world’s worst actors.” Executive director of Consumers’ Research Will Hild told me Tuesday that the WSJ article is “yet another confirmation of the need for Tether to undergo and release an audit by a credible third party.”
“Consumers should be wary of Tether’s involvement with unsavory and criminal actors from across the world, and it raises questions as to why they are so desperate to keep them on the platform,” Hild added.
Tether CEO Paolo Ardoino over the weekend assured the public that Tether’s reserves for USDT are safe and plentiful. He said the company has around $100 billion in US Treasurys and 82,000 bitcoin, plus 48 tons of gold.
Read more: Tether reports net profit of $5.2B in H1 2024
To be clear, the WSJ article makes no allegations that Tether has lied about or violated any laws regarding its reserve assets. The company in 2021 settled with the Commodity Futures Trading Commission for $42.5 million over its “claims that USDT was fully backed by US dollars.”
Ardoino added that Tether has historically worked with law enforcement agencies to combat fraud. He said the company has “voluntarily blocked” almost 2,000 wallets associated with suspected illegal activity.
Tether in September brought in Jesse Spiro, a PayPal veteran, to head up its government affairs team.
“Jesse will be responsible for leading policy and engagement efforts with lawmakers, regulators and key stakeholders,” Tether wrote in its announcement.
Sounds like he might be very busy.
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Source: https://blockworks.co/news/tether-denies-government-investigation