Key Takeaways:
- U.S. authorities are reportedly probing Tether’s alleged involvement with illicit actors.
- The Treasury Department is considering sanctioning the company, with severe implications for its U.S. transactions.
- Tether denies all allegations, calling claims unfounded and speculative.
The U.S. Justice Department, led by the Manhattan U.S. Attorney’s Office, has reportedly launched a criminal investigation into Tether, aiming to determine if third parties have used USDT for illicit activities, including terrorism funding and cyber hacking.
Investigators are reportedly looking into whether money laundering or other illicit financial schemes have been facilitated by the company transactions, including unauthorized use of the coin by groups under U.S. sanctions, according to the Wall Street Journal.
It is widely used across global crypto markets, but the company has faced years of scrutiny over its issuance practices and the management of its stablecoin. This new investigation, however, focuses on external users potentially exploiting the platform for illicit activity without the company itself being directly involved.
Treasury Weighs Possible Sanctions Against Tether
Besides that, it was reported that the U.S. Treasury is considering an anti-money laundering penalty and possible sanctions against Tether for use by entities under sanctions. The Treasury’s wide-ranging concerns largely cite the company for its alleged ties to people and groups under U.S. sanctions, including connections with Hamas and Russian arms dealers.
In the event of a sanction, it would bar Americans from any kind of transaction with the company and might have significant implications for its operations in the United States and beyond.
Tether’s CEO Paolo Ardoino has countered these allegations and criticized the report, claiming it repeats outdated accusations with no concrete evidence. Stating:
At Tether, we deal regularly and directly with law enforcement officials to help prevent rogue nations, terrorists, and criminals from misusing USDt. We would know if we are being investigated as the article falsely claimed.
Tether Condemns Speculation, Calls for Evidence-Based Reporting
In response, the company has issued a formal statement, labeling the Wall Street Journal article “reckless” and “baseless.” According to the company, the claims are not underpinned by credible sources and misrepresent its ongoing cooperation with global law enforcement.
The company pointed out that well-developed anti-crime procedures are already in place and emphasized that it conducts very extensive monitoring to prevent misuse.
Additionally, Tether has expressed it is unaware of any investigation that remains current against the company. As such, the sector is still waiting for any word from those at its forefront, because any potential sanctions against the company would have wider implications on its market standing.
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