Tether Facing DOJ Probe?

The Wall Street Journal reported on Friday that the federal government was investigating Tether for possible breaches of sanctions and anti-money laundering rules

The United States Justice Department has launched a criminal investigation into stablecoin issuer Tether, a Friday report by the Wall Street Journal has revealed. The probe will reportedly look into whether the crypto company violated anti-money laundering rules and sanctions.

The news caused crypto prices to plummet on Friday, despite Bitcoin appearing set to break past $70,000. However, Tether CEO Paolo Ardoino has refuted the claims.

Tether Facing DOJ Probe?

A federal investigation is looking into Tether for possible breaches of sanctions and anti-money laundering rules, the Wall Street Journal reported on Friday, citing anonymous individuals familiar with the matter.

The Manhattan U.S. attorney’s office is said to be handling a criminal probe into Tether, while the Treasury Department has reportedly been examining the possibility of sanctioning Tether due to the use of its USDT stablecoin by U.S.-sanctioned people and groups, such as Hamas. If the Treasury decides to pursue charges against Tether, it would block many Americans from doing business with the firm, according to the Wall Street Journal.

Meanwhile, as the crypto market began the day on an upsurge, Bitcoin was surging to as high as $69,000 and perhaps closing in on a late Friday or weekend challenge of the $70,000 mark. BTC slumped to as low as $65,896 — a 2% loss — following the news, based on data tracked by CoinGecko. At press time, the price had bounced a hair to $66,706.

Tether Vehemently Denies Investigation Report

Added Tether CEO Ardoino quickly reacted to WSJ’s market-moving report.

“As we told to WSJ, there is no indication that Tether is under investigation,” Tether’s Ardoino wrote in a post on X. “WSJ is regurgitating old noise. Full stop,” he added.

Tether mints USDT — the market’s third-largest cryptocurrency after Bitcoin, Ethereum, and the largest stablecoin. Stablecoins are cryptocurrencies whose value is tied to another asset, typically the U.S. dollar.

CoinGecko data shows that USDT currently boasts a market cap of a staggering $120 billion and is the most-traded cryptocurrency, with a 24-hour trading volume of $52 billion.

Yet Tether has been heavily scrutinized over USDT in recent years. The U.S. Commodity Futures Trading Commission, for instance, previously argued that Tether made “untrue or misleading statements and omission of material fact” related to the stablecoin. In 2021, The CFTC fined Tether $42.5 million for lying about USDT being fully backed by the U.S. dollar.

During the same year, Tether and its sister company Bitfinex agreed to halt all trading activity in New York as part of a settlement with the state’s Attorney General Letitia James. The two firms also agreed to a $18.5 million fine to end New York’s multi-month probe into their activities.

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