Stablecoin issue Tether is under scrutiny for reportedly using “shadowy intermediaries, falsified documents, and shell companies” to claw back their fingertips on global banks in 2018.
According to a WSJ report, “Losing access to the banking system was an existential threat to their business,” Tether and its subsidiary’s sister arm Bitfinex said in a lawsuit.
The report claims that a major Chinese trader of Tether attempted to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal,” as per an email from Stephen Moore, one of the owners of Tether Holdings Ltd.
Moore resisted the use of forged sales invoices and contracts, stating, “I would not want to argue any of the above in a potential fraud/money laundering case.”
Tether and Bitfinex reportedly disguised themselves as other businesses or individuals to access bank accounts.
“Using third parties occasionally caused problems, including hundreds of millions of dollars of seized assets and connections to a designated terrorist organization,” WSJ noted.
Tether’s attempts to retain bank access became more pressing in March 2017, when Wells Fargo & Co. banned multiple Taiwanese accounts used by Tether.
Allegedly, there were similar attempts from Tether and Bitfinex to open bank accounts in Turkey, Taiwan, New York, etc using fake documents and shell companies.
According to a person familiar with the situation, the US Justice Department (DoJ) is examining Tether.
Tether responded to WSJ’s accusations saying the report is “wholly inaccurate and misleading. Bitfinex and Tether have world-class compliance programs and adhere to applicable Anti-Money Laundering, Know Your Customer, and Counter-Terrorist Financing legal requirements.”
Tether CTO Paolo Ardoino tweeted “While I was on on stage I heard some clown honks, pretty sure was WSJ. As always ton of misinformation and inaccuracies. Poor guys, must be difficult be them but need better media.”
Tether continued by saying Bitfinex and Tether continuously assist the DoJ and other law enforcement agencies, and condemned the WSJ report as “unfair attacks.”
Crypto firms suffer a bad time with banks worldwide due to the nature of the industry. Ironically, the firms cut relations with Silvergate Bank following a decline in its stock as a result of a failure to file an annual 10k report on time.
Even Tether looked away from Silvergate Bank, with CTO Ardoino confirming zero exposure to the firm. Bitstamp, Microstrategy, Paxos, Galaxy Digital, Coinbase, etc., took similar measures.
