Tether Executives Allegedly Under DOJ Investigation for Suspected Bank Fraud

1 month ago

Executives from the stablecoin issuer – Tether – are reportedly facing a criminal probe into bank fraud.

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Tether executives are reportedly facing a probe from the US Department of Justice (DOJ), as prosecutors are looking into the company’s past activities with its banking partners.

  • According to Bloomberg on Monday (July 26, 2021), the information came from three anonymous sources familiar with the matter. The DOJ is investigating whether banks were aware of the crypto-based transactions carried out by Tether.

  • USDT is the largest stablecoin by market capitalization. The total number of tokens in circulation is worth over $68 billion.

  • This fact alone carries worrying notes for the cryptocurrency market if the investigation goes through.

  • Meanwhile, Tether has been in the crosshairs of US regulators for years. After a long legal tussle between the company and the office of the New York Attorney General (NYAG) since April 2019, Tether and cryptocurrency exchange Bitfinex reached a settlement deal with the NYAG.

  • As part of the deal, both companies paid $18.5 million in penalties and also agreed to stop servicing New York customers.

  • Prior to the settlement, Tether announced that it paid off its remaining loan of $550 million to Bitfinex back in February.

  • Meanwhile, an audit report by insurance company Moore Cayman confirmed that Tether tokens are fully backed.

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