Is Tether Under Investigation? Their Leaders Say No
Tether could be under investigation by US authorities, according to the Wall Street Journal, but Tether leaders deny it.
The Wall Street Journal (WSJ) says that cryptocurrency company Tether is being investigated by the US government, but Tether’s leaders deny these claims.
The allegation from WSJ is that the stablecoin Tether (USDT) and its owners are under investigation for sanctioning illegal activities and entities. That would include allowing Tether to be used for drug trafficking, money laundering, and terrorism funding, if these claims are true.
If valid, these allegations would mean that Tether allowed its coin to be used for illegal activity and either had knowledge of these activities or did not put safeguards in place to adequately prevent illegal activity.
Stablecoins like Tether fall under the classification of decentralized currency, even though they are tied to a fiscal currency. In Tether’s case, that would be the US dollar. As a decentralized currency, there is a lot of freedom in how the coin can be used, and there is often little accountability when it comes to determining who is using the coins and what they are doing with them. The freedom and anonymity of cryptocurrency is also what makes it attractive for criminals who do not want their actions or identity to come to light.
Tether in Trouble
The Tether coin is the leading stablecoin and the third most traded cryptocurrency coin, behind only Bitcoin (BTC) and Ethereum (ETH). According to the Wall Street Journal, the US Attorney’s Office is looking into the stablecoin for any indication of permitting illegal activity, either knowingly or unknowingly.
Tether’s own CEO says no investigation is happening, and he released a statement on X saying that WSJ is simply repeating old claims and has no proof to back up their allegations.
We do know that federal prosecutors were investigating Tether’s providers for their potential involvement in Russian arms deals. There has also been talk from the Treasury Department that US citizens should not be allowed to buy and sell USDT. There continue to be concerns about the security of using Tether and how it could compromise the US government’s ability to defend itself.
Tether reacted to those past claims by freezing a number of wallets and putting safeguards in place to prevent illegal activities. For now, though, we do not know for sure whether Tether is still under investigation or whether WSJ is simply reporting old news.
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