Tether’s Use of USDT in Criminal Activities, CEO Challenges Report

Key Takeaways:

• US authorities are reportedly investigating Tether’s alleged involvement with illegal actors.
• The Treasury Department is considering sanctions against the company with serious implications for its U.S. transactions.
• Tether denies all allegations and describes the claims as unfounded and speculative.

The U.S. Department of Justice, led by the Manhattan U.S. Attorney’s Office, has reportedly launched a criminal investigation into Tether to determine whether third parties used USDT for illegal activities, including terrorist financing and cyber hacking.

Investigators are reportedly looking into whether money laundering or other illegal financial schemes were facilitated by the company’s transactions, including unauthorized use of the coin by groups subject to U.S. sanctions, according to the Wall Street Journal.

It is widely used in global crypto markets, but the company has faced years of scrutiny over its issuance practices and management of its stablecoins. However, this new investigation focuses on external users who may be abusing the platform for illegal activities without the company itself being directly involved.

The Treasury Department is considering possible sanctions against Tether

Additionally, it has been reported that the US Treasury Department is considering an anti-money laundering penalty and possible sanctions against Tether for use by companies subject to sanctions. The Treasury Department’s broad concerns center largely on the company because of its alleged ties to people and groups under U.S. sanctions, including ties to Hamas and Russian arms traffickers.

If sanctioned, this would prohibit Americans from engaging in any type of transaction with the company and could have a significant impact on its operations in the United States and beyond.

Tether CEO Paolo Ardoino countered these allegations and criticized the report, saying it repeated outdated accusations without concrete evidence. It says:

At Tether, we work regularly and directly with law enforcement to prevent rogue states, terrorists and criminals from misusing USDt. We would know if we were under investigation as the article falsely claims.

Tether condemns speculation and calls for evidence-based reporting

In response, the company issued a formal statement calling the Wall Street Journal article “reckless” and “baseless.” According to the company, the claims are not based on credible sources and misrepresent the company’s ongoing cooperation with global law enforcement agencies.