The U.S. federal government is reportedly investigating Tether, a stablecoin issuer, according to The Wall Street Journal on Oct. 25, citing anonymous sources. The U.S. Attorney’s Office for the Southern District of New York is conducting a criminal probe into whether Tether’s USDT has been used by third parties for illegal purposes like money laundering.

This investigation has been underway for several years. At the same time, the Treasury Department is also considering sanctions due to the frequent use of USDT by sanctioned individuals and groups, including some linked to terrorism and arms dealing.

The report estimates that around $190 billion worth of USDT is traded daily. In response to the report, Tether released a statement calling the allegations “outrageous” and criticizing the publication for making “reckless” assertions without official confirmation or named sources. Tether emphasized its history of cooperating with law enforcement to prevent misuse of its stablecoin.

Ardoino added on 𝕏 that there was no evidence of an ongoing investigation against Tether, dismissing the Journal’s claims as “regurgitated noise.”

Tether asserts that it actively collaborates with law enforcement, stating it has aided over 145 agencies in recovering more than $108.8 million in USDT tied to illicit activities since 2014. Following the recent report, the broader crypto market reacted, with Bitcoin, Ether, and other major cryptocurrencies experiencing slight declines.

Resources:

WSJ

Tether

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