The United States government has announced a formal investigation into crypto firm Tether, the developer of the USDT stablecoin. According to a report from the Wall Street Journal, authorities looking at possible violations of anti-money-laundering and sanctions rules by the firm. The company’s CEO, however, says that the investigation is not true.
The WSJ reports the criminal investigation will be run by prosecutors at the Manhattan U.S. attorney’s office. Authorities are investigating if the stablecoin has been used by third parties to fund illegal activities. These crimes are as extreme as drug trafficking, terrorism, and hacking.
For years, Tether and its cryptocurrency have been the center of growing concern for federal regulators and law enforcement. In crypto, there is always the fear of wrongdoers using digital assets to circumvent sanctions and authority to commit crimes. Since Tether’s USDT is pegged to the US dollar, it is an ideal substitute in places where the use of the U.S. currency has been banned by regulators. Thus, an investigation by the US does seem plausible.
Tether CEO Says US Government Investigation is Nonsense
Tether’s CEO Paolo Ardonio said in a statement that the company had no indication of this investigation. “As we told to WSJ there is no indication that Tether is under investigation,” the CEO said on X. ” WSJ is regurgitating old noise. Full stop.”
Additionally, the company itself said it had no previous indication the company is facing a broader investigation. “To suggest that Tether is somehow involved in aiding criminal actors or sidestepping sanctions is outrageous,” Tether said in a statement. “We work actively with U.S. and international law enforcement to combat illicit activity, as we’ve publicly demonstrated many times.”
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The Tether stablecoin is one of the world’s most traded cryptocurrencies, with approximately $190 billion in USDT moving each day. It is also a vital financing tool for several of the U.S.’s top national security concerns. These include the North Korean nuclear weapons program, Mexican drug cartels, Russian arms companies, and Hamas.