The U.S. federal government is investigating Tether – issuer of the world’s largest stablecoin, USDT – for possibly violating anti-money laundering rules and sanctions, the Wall Street Journal reported on Friday.
- Following the news, Bitcoin’s price plummeted from $68,600 to $66,589 at writing time.
Prosecutors at the Manhattan U.S. attorney’s office are investigating whether the USDT cryptocurrency is being used by third parties to evade the law. - However, Tether CEO Paolo Ardoino responded to the news by saying that no such investigation is underway.
- “As we told to WSJ there is no indication that Tether is under investigation,” Ardoino wrote to Twitter. “WSJ is regurgitating old noise. Full stop.”
- Tether is one of the longest-standing stablecoins and has always managed to satisfy redemptions and maintain its peg until now.
- Suspicion has circulated throughout the years that its $100 billion reserves cannot be found, but Cantor Fitzgerald CEO Howard Lutnick has claimed that his company looks after the US Treasury bills that are backing Tether’s tokens.
- Tether has faced attacks from both Coinbase and Circle for allegedly facilitating terrorist financing. “I hope that they’re looking at this seriously given Tether’s reputation, as well as the data that we’ve seen that they’re contributing to terrorist financing and other malign activities,” a Circle representative told Congress in February.
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