The DOJ charged Tether executives with a criminal probe whether they committed bank fraud, according to a report on Monday.
As per the report, The Department of Justice is “scrutinizing whether Tether concealed from banks that transactions were linked to crypto, said three people with direct knowledge of the matter who asked not to be named because the probe is confidential”. It is investigating Tether for an offence conducted years ago when Tether was in its more nascent stages.
“Tether routinely has open dialogue with law enforcement agencies, including the DOJ, as part of our commitment to cooperation and transparency,” the company said in a statement.
According to Bloomberg’s sources, federal prosecutors sent letters to individuals at Tether informing them that they’re targeting an investigation. The notice also signals that a decision on whether to bring a case could be made soon. Senior Justice Department officials will ultimately determine whether the charges are warranted.
Criminal charges would mark one of the most significant developments in the U.S. government crackdown on digital currencies. Tether is the most popular stablecoin with more than $62 billion in circulation. Investors utilise the stablecoin to trade bitcoin without needing to exchange crypto for fiat money. It also estimates that Tether underpins more than half of all bitcoin’s trades, as per a report.
Tether has already drawn the ire of regulators. In February, Bitfinex and several Tether affiliates agreed to pay $18.5 million to settle claims from the New York Attorney General (NYAG). It relates to allegations that it had previously misrepresented its backing.
Tether Response to Bloomberg Article
Tether responded to the Bloomberg report in a statement, saying it is “business as usual as Tether.”
Bloomberg published an article based on unnamed sources and years-old allegations, patently designed to generate clicks, Tether said. “This article follows a pattern of repackaging claims as ‘news.’ The continued efforts to discredit Tether will not change our determination to remain leaders in the community.”
The company continued: “Tether routinely has open dialogue with law enforcement agencies including the U.S. Department of Justice, as part of our commitment to cooperation, transparency, and accountability”. We are proud of our roles as industry leaders in promoting cooperation between industry and government authorities in the U.S. We remain customers to our customers and the industry-leading technology and transparency that has led to our growth.
The CEO of blockstream.com, Adam Back, also supported Tether by replying to its tweet.