The US government is investigating Tether, the biggest stablecoin. The government has concerns that Tether may be linked to illegal activities. This is not the first time Tether has dealt with the U.S. government; this is the 19th time.
ImproveShow HardOn Friday, the Wall Street Journal said senior officials from the Manhattan U.S. Attorney’s office are investigating whether Tether has been used by others for illegal activities. Tether, which uses the ticker USDT, is known for being anonymous and hard to charge back, making it appealing for illegal purposes.
Tether’s legal issues started in 2012, when lawsuits were filed against a company linked to its sister firm, Bitfinex. Over the years, different government probes have examined Tether.
These include: .
2015: Bitfinex admits a Commodity Futures Trading Commission (CFTC) investigation. USDT’s market cap was $451,000.
2016: Bitfinex settles a CFTC claim for illegal trading. USDT’s market cap was $2.9 million.2017: Tether says it lacks a bank account. It had $61.5 million in cash. USDT’s market cap reached $418 million.
2018: The Department of Justice and CFTC probe Bitcoin price manipulation linked to USDT, which surged to $2.5 billion in market cap.
2021: Tether pays $41 million in fines for misleading claims about its reserves. USDT’s market cap rose to $70 billion.2022: U.S. authorities seize 73,586 USDT linked to crime. USDT’s market cap is $66 billion.
2023: Tether complies with requests from the DOJ and others. USDT’s market cap reaches $90.8 billion.
2024: The Manhattan U.S. Attorney’s office investigates. USDT’s market cap soars to $120 billion.
Despite open questions around Tether, it keeps growing. This is especially true after USDC briefly lost its $1 peg in March 2023. Even with new stablecoins from companies like PayPal, Tether still dominates. Tether gets support from Cantor Fitzgerald, led by Trump advisor Howard Lutnick.
“Tether CEO Paolo Ardoino said there is no investigation into Tether. He posted this on X after the news came out. He said the Wall Street Journal is just repeating old information. That’s all there is to it.” .
However, news about an investigation into Tether’s business causes concerns. This echoes past impacts like the FTX collapse. Tether’s stablecoin is very important in crypto. Potential charges could be similar to those against Binance. Binance faced allegations of money laundering and sanctions violations.
