[NEWS] US prosecutors investigating Tether for money laundering violations, CEO denies

As the US government continues to take tough legal action against the cryptocurrency industry, it has been revealed that Tether, which issues the stablecoin USDT, is currently under investigation by US prosecutors. The Wall Street Journal (WSJ) reported.

According to the report, federal inspectors in Manhattan are investigating whether Tether violated money laundering and sanctions laws by being used by international criminal networks for drug trafficking, terrorism and hacking.

Meanwhile, Tether has completely denied all the charges. In a statement, Tether criticized the WSJ, saying, "It is extremely irresponsible to write such a confident and reckless allegation when authorities have not officially confirmed these allegations and the sources of the information have not been made public. The article also ignores Tether's well-documented and extensive negotiations with law enforcement to crack down on bad actors who seek to misuse Tether and other cryptocurrencies."

USDT, a stablecoin with a market capitalization of over $120 billion, plays an important role in cryptocurrency trading and as a settlement currency, as well as a hedge against the volatility of local currencies in many countries where citizens do not have access to the dollar.

However, regulatory uncertainty has led to persistent doubts about how stablecoins are backed and to what extent USDT is used for crime.

Tether has been under investigation before, with the New York State Attorney General's Office fined Tether and its parent company Bitfinex $18.5 million in 2021 for operating in the state. The CFTC also fined Tether $41 million in 2021 for engaging in illegal trading.

It has now been reported that the Department of Justice's investigation into whether Tether committed bank fraud has expanded.

Reference:WSJ
Image: Shutterstock

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