A recent report by The Wall Street Journal alleges that Tether, the issuer of the USDT stablecoin, is under federal investigation, sparking concerns across the cryptocurrency market. Tether CEO Paolo Ardoino dismissed the report, labeling it as “old noise,” but the publication’s claims still rattled investors.
Federal Agencies Reportedly Scrutinizing Tether
The Journal cited anonymous sources suggesting that the U.S. Department of Justice (DOJ) and the Department of the Treasury are investigating Tether. The DOJ’s probe, led by the U.S. Attorney’s Office for the Southern District of New York, reportedly examines whether third parties have used Tether to launder money or finance illicit activities. This investigation has allegedly been ongoing for several years.
Meanwhile, the Treasury Department is reportedly assessing Tether’s potential ties to sanctioned entities. The Journal stated that Tether has been widely adopted by groups under U.S. sanctions, including entities tied to the terrorist organization Hamas and Russian arms traffickers.
Tether’s Firm Rebuttal and Record of Law Enforcement Cooperation
In response, Tether denounced the report, calling it “outrageous” and condemning the lack of named sources or official confirmations. Tether highlighted its longstanding record of cooperation with law enforcement, noting that it has aided over 145 agencies in recovering over $108 million in USDT connected to illegal activity since 2014.
Ardoino doubled down on social media, emphasizing that there is no indication of an active investigation into Tether, calling the report a rehash of past criticisms.
Ongoing Criticism and Tether’s Regulatory History
Tether remains a frequent subject of scrutiny from various organizations, including the United Nations and consumer protection advocates. In 2021, Tether and its affiliate Bitfinex paid $42.5 million to the Commodity Futures Trading Commission (CFTC) for regulatory violations. Ripple CEO Brad Garlinghouse has also publicly remarked that “the U.S. government is going after Tether,” though he did not provide details to support this claim.
With The Wall Street Journal estimating daily trading volumes of up to $190 billion in USDT, any regulatory action could significantly impact the crypto market. For now, Tether’s leadership remains steadfast, asserting that ongoing collaboration with law enforcement is part of their commitment to a compliant, transparent operation.
