Tether (USDT) is the most valuable stablecoin by market cap ($61.8 billion). Now Bloomberg reports about ongoing investigations by the US Department of Justice. Tether promptly responds, stating: They are working with law enforcement agencies from around the world. A confirmation that there is contact with authorities, but at the same time a clear statement regarding the legality of the undertakings. At the same time, the mood of crypto investors was very good due to the rising prices.
Bloomberg speaks of bank fraud
In the focus of the investigation are those responsible behind the token. The accusation: bank fraud on a grand scale. Here, those responsible are accused of concealing crypto transactions from banks. Only a few hours later, Tether responded in an official press release that Bloomberg was picking up on old facts here and ultimately twisting them.
In the end, Bloomberg’s statements were only based on an anonymous source, without providing any real evidence. In addition, it is said that the company always cooperates with the authorities for regulatory purposes. In the wording, Tether reports:
“We are proud of our role as an industry leader in fostering collaboration between industry and government agencies in the U.S. and around the world. We remain committed to our customers and the industry-leading technology and transparency that has led to our growth.”
Criticism of Tether is not new
Tether has been under criticism for years. It says the way the token is backed is too opaque. Behind Tether are the operators of the crypto exchange BitFinex. USDT is still the most traded stablecoin, while USDC (in cooperation with CoinBase) and Binance USD from Paxos (in cooperation with Binance) are competing. Dan Burstein, CCO of Paxos, stated just a few weeks ago that Tether is not a real stablecoin.
There are repeated warnings against using Tether. For example, the Tether holdings are not sufficiently covered. In addition, they were ordered to pay a fine of 18.5 million euros in New York – because of illegal activities, they decided. However, especially in the crypto sector, the gray area between legal and illegal actions is very large, especially due to the not clearly regulated legal situation in many countries.
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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. [Image: Shutterstock]