Crypto Market Rattled by Unverified Tether Investigation Report
The crypto market responded on October 25th after The Wall Street Journal (WSJ) released what it referred to as an exclusive article. According to this report, the U.S. federal authorities are still investigating the stablecoin issuer.
The article suggested that U.S. government agencies may investigate Tether’s illicit use. Tether’s CEO, Paolo Ardoino, described the report as old noise. Let’s look at the crypto market and Tether’s response. Read on to get the details.
Tether Under Scrutiny
The WSJ report flagged prospects of criminal probes by the U.S. Attorney’s Office in the Southern District of New York. Some third parties allegedly involved Tether’s analytics for stablecoin in unlawful operations. Most of these investigations have taken several years to complete.
The report refers to the U.S. Treasury Department, which has decided to freeze Tether because some people they banned used USDT.
Exclusive: Crypto firm Tether is under federal investigation for possible violations of sanctions and anti-money laundering rules https://t.co/TuBoIyYBWA
— The Wall Street Journal (@WSJ) October 25, 2024
Tether Fires Back
On its website , Tether stated, “It is outrageous to claim that authorities associate Tether with crimes or sanctions evasion.” Tether’s Legal team keeps in touch with more than 145 legal agencies and helps recover millions of dollars linked to USDT’s use in illegal acts.
Tether CEO Ardoino went on social media to claim that the problem is non-existent. He said, “As we said to WSJ, there is no sign that Tether is under investigation.” WSJ is regurgitating old noise. Full stop.”
As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.
— Paolo Ardoino 🤖🍐 (@paoloardoino) October 25, 2024
Market Reaction
What the WSJ said had the effect of scaring the crypto market . When the news filtered in, the Bitcoin price dropped from $67,367 to $66,016. Ethereum and others followed the same pattern.
🚨 BTC Momentum Check
📉 #BTC dropped from $69K to $66.5K following #WSJ report on DOJ/Tether probeKey Points:
• DOJ investigating #Tether (USDT) 🔍
• Focus: sanctions & AML compliance
• #USDT market cap: $120B
• Tether CTO: “old noise”Source: https://t.co/fPuWFzqMYn
— BitTap (@BitTapGlobal) October 28, 2024
Is Tether Actually Under Investigation?
Regulators have often scrutinized Tether. In 2021, the CFTC determined that Tether and Bitfinex broke trading laws and paid a $42.5 million penalty.
Ripple’s CEO, Brad Garlinghouse, recently discussed Tether on a podcast and hinted that it could be a government target. Institutions and public figures have criticized Tether for some time.
JUST IN: 🇺🇸 US Government launches investigation into $USDT crypto firm Tether! 🌎
“The US Government Is Going After Tether. That Is Clear To Me.” – @bgarlinghouse
pic.twitter.com/HDexIBx4Vg— Max | Crypto Attacks 🐎 | 🤝❤️ (@MaxCryptoAttack) October 26, 2024
Conclusion
The crypto market is waiting to see if any official actions will happen or if this is, as Ardoino says, “old noise.” No official has owned up to the claims in this report, and nobody has confirmed the details yet. The quick fall in significant crypto prices shows that even whispers of investigations can affect how people feel about the market. No matter how severe these claims are, Tether’s response shoots down the allegations with firm and unwavering statements. This is a clear example of market FUD (Fear, Uncertainty, and Doubt).
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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