Bloomberg reports US Justice Department has opened an inquiry into Tether; the company calls the news clickbait
The U.S. Department of Justice has opened an inquiry into possible bank fraud by executives at Tether, the issuer of the largest stablecoin USDT. Bloomberg reports, citing informed sources.
According to the publication, authorities are interested in the early stages of the company’s operations. Specifically, federal prosecutors are examining whether Tether hid crypto-related transactions from banks, three sources said.
Bloomberg quotes the company stating that Tether “regularly maintains open dialogue with law enforcement, including the Department of Justice, as part of its commitment to cooperation and transparency”.
One of the sources said that the agency sent letters to certain individuals indicating that they are subjects of the investigation.
“The notices indicate that a decision to bring charges could be made soon, and top Department of Justice officials will ultimately determine whether the allegations are substantiated,” the statement said.
As of writing, USDT ranks third by market capitalization among the largest crypto assets, according to CoinGecko. Its market cap stands at $62.3 billion.
Tether remains the undisputed leader of the sector. According to The Block, USDT’s share of the total stablecoin supply stands at 57.81%.
According to the report, as of March 31, 2021, cash and cash equivalents formed 76% of the reserves of Tether Holdings Limited.
Subsequently, Tether commented on reports regarding a possible Justice Department inquiry.
Tether responds to Bloomberg article ⬇️https://t.co/odVIhCsU5F
— Tether (@Tether_to) July 26, 2021
“Continued efforts to discredit Tether will not change our resolve to remain leaders in the community,” the statement said.
Representatives described the Bloomberg piece as clickbait, based on unnamed sources and claims of long-standing allegations. Tether emphasised its commitment to customers, leading technology in the industry, and transparency.
Earlier, the stablecoin issuer and the affiliated cryptocurrency exchange Bitfinex settled a dispute with the New York Attorney General’s Office over the $850 million loss.
In June, Boston Fed President Eric Rosengren described the stablecoin USDT as “the new disruptor” of the short-term lending market.
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