Tether is being investigated by the United States again, accused of illegal trading? CEO's response: old news!

The US government is investigating Tether for suspected violations of sanctions and anti-Money Laundering regulations

The U.S. federal government is investigating stablecoin issuer Tether for potential violations of sanctions and Anti-Money Laundering (AML) regulations. According to a report from The Wall Street Journal on October 25th, this criminal investigation is led by the Manhattan U.S. Attorney's Office and focuses on whether third parties are using Tether's $USDT to fund illegal activities such as drug trafficking, terrorism, hacking attacks, and Money Laundering.

Accusations involving $USDT being used for illegal transactions have caused market panic

The focus of the investigation is whether $USDT Stable Coin is widely used by individuals and organizations sanctioned by the United States, including the terrorist organization Hamas and Russian arms dealers. The US Treasury Department is also considering sanctions against Tether, which may prohibit US citizens and businesses from trading with the company. As the largest Stable Coin in terms of volume globally, $USDT has a daily volume of up to 190 billion US dollars, and this news has sparked widespread attention and shock in the market.

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Tether strongly denies the accusations, with the CEO calling the report 'stale noise'.

Tether strongly denies the above accusations, calling the claims "absurd" in an official statement. The company stated, "The insinuation that Tether is involved in assisting criminal activities or evading sanctions is baseless." Tether CEO Paolo Ardoino also stated on social media, "As we told the Wall Street Journal, there is no indication whatsoever that Tether is under investigation. The Wall Street Journal is just echoing old noise."

Image source: X Tether CEO Paolo Ardoino responds to media reports.

Tether emphasizes that they actively cooperate with US and international law enforcement agencies to combat the use of $USDT and other cryptocurrencies for illegal activities by bad actors. The company states that the transparency of blockchain makes illegal use impractical, as all transactions are recorded on the public ledger, allowing authorities to trace and, if necessary, seize funds.

The market reacted sharply, Crypto Assets prices fell

However, after the news came out, there was a drastic Fluctuation in the Cryptocurrency market. The price of BTC once fell from $68,000 to $66,000, with a drop of over 3% within 24 hours. (As of the time of drafting, the price of BTC is $66,788) Other major Cryptocurrencies such as Ethercoin, BNB, and Solana also experienced declines. Market analysts point out that the investigation into Tether may trigger a crisis of confidence in stablecoin, thereby affecting the entire Cryptocurrency ecosystem.

Source: TradingView BTC experienced drastic fluctuation after news of Tether investigation

However, some experts believe that this may only be a short-term market response. Tether has faced multiple regulatory challenges in the past, but has continued to operate. In addition, Tether has stated that it has strengthened monitoring measures, cooperated with blockchain analysis companies, and frozen 1,850 suspicious encryptionWallets, recovering approximately $114 million in assets. They have also expanded their lobbying team, hiring former PayPal senior executives with experience in digital currency regulation, demonstrating a focus on compliance.

Further Reading Stable Coin is a killer app! Tether documentary analysis: A story about freedom The road to 120 billion magnesium! Why has Tether succeeded? What will happen in the next ten years? Tether in trouble? US consumer protection agency warns: Tether's US dollar reserves are opaque, just like FTX Unregulated currency? Foreign media reviews Tether: Through Tether, everyone can use US dollars.