Tether executives under DOJ investigation for bank fraud

The United States Department of Justice (DOJ) is launching an investigation into whether Tether (USDT) executives committed bank fraud

. The potential criminal case could have broad implications for the cryptocurrency industry. The



Investigation focuses on events that took place years ago, when Tether


still growing. Federal prosecutors are particularly interested in whether Tether hid from banks that transactions

were tied to cryptocurrency.

According to one person, the DOJ recently sent letters to individual entities informing them that they were under investigation. The notices indicate that a decision may soon be made on whether or not to file a case.

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Potential precedent

If the investigation results in criminal charges, it could set a precedent in the U.S. approach to currency. This is due to Tether’s influence as the most popular stablecoin. There are currently about $62 billion worth of USDT in circulation, which underpins more than half of all bitcoin

transactions. The company said in a statement:

Tether routinely maintains an open dialogue with law enforcement agencies, including DOJ, as part of our commitment to cooperation and transparency.

Control of stablecoin


announcement on the investigation comes amid an increase in interest in stablecoin

from regulators. The U.S. Treasury Department and the Federal Reserve believe USDT may be hiding money laundering transactions. They are also concerned that the tokens could potentially threaten financial stability.

This is because Tether and other stablecoins are backed by fiat currency, typically one US dollar, either through real money or shares. There are concerns that many traders selling their stablecoins at once could lead to a run on the underlying asset. According to Fitch Ratings, this could destabilize short-term credit markets.

Although U.S. Treasury Secretary Janet Yellen said last week that Tether should be regulated quickly, other regulators have a different view Earlier this year, Bitfinex and several Tether-related entities <a href=”https://bei

ncrypto.com/tether-usdt-reaches-18-5-million-settlement-with-ny-ag/”>agreed to pay $18.5 million to settle claims by New York Attorney General Letitia James. She claims that the companies hid losses and lied that each token was backed by one US dollar.

Since the companies did not have access to banking in 2017, it would have been impossible for them to hold the reserves. Although the companies paid the fine, they entered into a settlement without admitting or denying the allegations.


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