Tether has contested recent allegations made in a report by The Wall Street Journal (WSJ), which suggested an increase in the illicit use of its stablecoin.
The report claimed that Tether was being employed for activities such as money laundering, terror financing, and sanctions evasion.
These claims were based on information from indictments, blockchain analysis, and sanctions notices.
Tether's appeal lies in its ability to maintain a 1:1 exchange rate with the United States (US) dollar, making it a favoured tool among traders.
However, this same convenience has also attracted illicit financial activities, according to the report.
It cited instances where Tether was implicated in financing Hamas, paying Chinese fentanyl suppliers, funding North Korea's nuclear programme, and facilitating the purchase of sanctioned Venezuelan oil for Russian oligarchs.
In response to these allegations, Tether issued a blog post, disputing the WSJ's claims, stating that the reports were based on "highly erroneous interpretations of data."
In its post, Tether stated:
“There is simply no evidence that Tether has violated Sanctions laws or the Bank Secrecy Act through inadequate customer due diligence or screening practices. Decision-makers, stakeholders and the general public must correctly discern between conjecture and fact. We invite and encourage rigorous scrutiny based on factual, corroborated data rather than misinterpretation and misinformation."
Despite these clarifications, The WSJ has not issued a correction.
In light of these developments, US lawmakers have increased their scrutiny of Tether and other cryptocurrency companies.
This has led to bipartisan calls for the application of the Bank Secrecy Act and other oversight measures to combat money laundering and illicit finance in the cryptocurrency space https://www.coinlive.com/news/Is-Crypto-Being-Exploited-for-Financing-Terrorism-Like-the-Israel-Hamas.
Senator Cynthia Lummis and Representative French Hill have urged the Justice Department to expedite its investigation into Tether, emphasising the importance of cutting off funding to terrorists targeting Israel.
When it comes to illicit finance, crypto is not the enemy - bad actors are.
I sent a letter asking DOJ to finish its investigation and consider criminal charges against Binance and Tether after reports they served as intermediaries for Hamas and engaged in illicit activities. pic.twitter.com/M3KGNFkpWc— Senator Cynthia Lummis (@SenLummis) October 26, 2023Sponsored Business Content
The letter reads:
“We urge the Department of Justice to carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism through violations of applicable sanctions laws and the Bank Secrecy Act. To that end, we strongly support swift action by the Department of Justice against Binance and Tether to choke off sources of funding to the terrorists currently targeting Israel."
Tether's centralised nature, which allows the company to freeze the token, has also come under scrutiny in contrast to the decentralised nature of other cryptocurrencies like Bitcoin.
In its response, Tether expressed its openness to constructive dialogue about integrity and security.
It emphasised the importance of education regarding virtual assets, regulatory compliance, and due diligence.
Tether also asserted its commitment to safeguarding the transparency of blockchain technology and refuted claims of violating sanctions laws or the Bank Secrecy Act.
Tether revealed that it has been collaborating proactively with 31 law enforcement agencies across 19 jurisdictions to combat malicious activities.
They reported freezing $835 million in assets linked to unlawful activities, primarily involving hacks of crypto exchanges and DeFi platforms.
In addressing concerns related to the Middle East, Tether cooperated with the NBCTF in Israel to freeze 32 addresses associated with illegal activities, safeguarding $873 million.
While the amounts involved are comparatively small in comparison to traditional financial systems, Tether remains committed to maintaining a vigilant stance against illicit conduct and continues to work with law enforcement agencies in cases related to Ukraine and Israel.
Tether urged the US government to fact-check media misinterpretations of data.
Nine Chinese nationals were sentenced for running a fake cryptocurrency scam that tricked over 66,000 people in India out of $6 million. They used fake platforms, social media personas, and money laundering through USDT to hide their crimes.
AnaisCircle, the USDC stablecoin issuer, has filed for an IPO with the SEC amidst tech market turbulence and Nasdaq’s worst quarter since 2022. It faces stiff competition and economic challenges, including fluctuating interest rates.
KikyoTether has purchased 8,888 BTC for $735 million, increasing its Bitcoin holdings to 92,647 BTC, as part of its strategy to strengthen reserves with Bitcoin.
AnaisWirex has launched Wirex Travel, offering up to 65% off hotel bookings and 8% cashback on Wirex card payments. Users can book with fiat or crypto, including Bitcoin and Tether, while accessing exclusive deals. This move challenges Binance-backed Travala in the crypto travel market.
CatherineTether purchased $33.1 billion in U.S. Treasury securities, becoming the seventh-largest holder of U.S. government debt. This move strengthens the stability of its USDT stablecoin and highlights its growing role in both digital and traditional finance.
AnaisRussia is increasingly using cryptocurrencies like Bitcoin and Tether to conduct oil trade with China and India, bypassing Western sanctions. The use of intermediaries and offshore accounts has made crypto a key tool in these transactions, speeding up operations despite financial restrictions.
WeatherlyOnchain data shows a trader lost $733,000 in USDC for just $19,000 in USDT due to a sandwich attack, sparking money laundering suspicions.
KikyoMetro Singapore has teamed up with dtcpay to enable stablecoin payments for online and in-store purchases at Metro Paragon and Metro Woodlands, supporting USDT, USDC, FDUSD, and WUSD.
CatherineBank of America plans to launch a USD-backed stablecoin once US lawmakers approve the regulatory framework. The move could bring stablecoins into mainstream consumer banking, increasing competition among major financial institutions.
WeatherlyCircle's CEO, Jeremy Allaire, is calling for mandatory registration of stablecoin issuers in the U.S. to ensure transparency and protect consumers. Meanwhile, U.S. lawmakers and regulators are intensifying efforts to create clear rules for stablecoins, with growing scrutiny on companies like Circle and Tether.
AnaisWhile Wall Street’s interest has boosted the entire crypto market, William Quigley said it also comes with risks.
JinseFinanceDigitex CEO Adam Todd charged with Bank Secrecy Act violations for unregistered crypto futures platform. Previous CFTC involvement for token price manipulation. Regulatory scrutiny in crypto sector intensifies.
EdmundUSDT is also present on Ethereum, Solana, Algorand, EOS, Liquid Network, Omni, Tron, and Kava
BeincryptoToday, the U.S. Commodities and Futures Trading Commission (CFTC) filed a lawsuit against crypto exchange Binance and its CEO, Changpeng ...
BitcoinistTether, which is the largest stablecoin issuer by market capitalization, added its offshore Chinese Yuan (CNHT) to the Tron network.
OthersTether has stated that its secured loans are heavily collateralized, hitting back at WSJ.
Beincrypto
Tether said the hedge funds that saw Terra’s collapse as a reason to short USDT have “a fundamental misunderstanding of both the cryptocurrency market and Tether."
CointelegraphWith a peso-backed stablecoin, Tether is essentially “recreating the foreign exchange market with a Tether product,” Ardoino said.
CointelegraphThe total USDC supply on Ethereum has surpassed that of Tether, making the USDT supply on Ethereum second for the first time.
Cointelegraph
