Tether CEO Paolo Ardoino has denied allegations that the company is facing an investigation by the US government.
This comes in response to a Wall Street Journal report about an alleged investigation by US authorities into Tether’s involvement in sanctions violations and anti-money laundering (AML) transgressions. The investigation is reportedly being led by the US Attorney’s Office in Manhattan.
According to unnamed sources cited by the WSJ, the investigation is focusing on whether Tether was used in illegal activities such as drug trafficking, terrorism and hacking. “There is no indication that Tether is under investigation,” Ardoino said on X (formerly Twitter).
Market reaction
The WSJ report stated that Tether is under the radar of U.S. federal investigators, who are assessing whether the stablecoin is facilitating illegal transactions. The Treasury Department has reportedly considered sanctions against Tether, citing its use among sanctioned individuals and groups.
Federal scrutiny of the cryptocurrency industry is nothing new, but Tether's prominence in global transactions gives it a unique level of attention. Tether responded with a statement refuting the allegations.
“It is extremely irresponsible for the WSJ to write articles with such certainty that make irresponsible claims when no authorities have come forward to confirm these rumors, and no sources have been named,” the company said.
According to Tether, the allegations are based on “pure speculation,” and it insists that there has been no official confirmation of any investigation. Tether also highlighted its extensive history of collaborating with law enforcement to identify bad actors who are abusing its platform.
Following the WSJ report, cryptocurrency prices fell. Bitcoin, which was trending near $69,000, fell to $66,500, a drop of nearly 2% within a few hours of the news breaking. Ethereum saw a 2.9% decline to $2,391, although buying activity in the derivatives market remained strong.
The US presidential election, which will take place in exactly ten days, is widely expected to be a major catalyst for the markets. Analysts expect Bitcoin to hit a new all-time high.