- The Wall Street Journal reveals new US government investigation into Tether for potential links to illegal activities.
- Tether’s legal challenges date back to 2012, with multiple US government agencies involved in various investigations.
- USDT market cap grew from $451,000 in 2015 to $120 billion in 2024 despite regulatory scrutiny.
- Notable settlements include $18.5 million with NYAG and $41 million with CFTC for false claims about reserves.
- Tether has faced investigations from DoJ, IRS, Secret Service, and multiple US Attorneys’ offices.
Manhattan US Attorney Launches New Tether Investigation
According to a recent Wall Street Journal report, the Manhattan US attorney’s office has initiated an investigation into Tether, focusing on potential third-party use of the cryptocurrency for illegal activities.
This investigation adds to Tether’s extensive history of regulatory challenges spanning over a decade. As the issuer of USDT, the world’s largest stablecoin with a market capitalization of $120 billion, Tether has attracted significant attention from law enforcement agencies.
Timeline of Major US Government Actions
The company’s legal challenges began as early as 2012 with lawsuits against Bitcoinica, whose code was later used by Tether’s sister company, Bitfinex.
In 2021, Tether reached a significant settlement with the New York Attorney General’s office, paying $18.5 million to resolve allegations about covering up financial losses. That same year, the Commodity Futures Trading Commission (CFTC) imposed a $41 million fine on Tether for making false claims about its USD reserves.
Growth Despite Regulatory Pressure
Despite continuous regulatory scrutiny, USDT’s market presence has shown remarkable growth:
- 2015: $451,000 market cap
- 2019: $2 billion market cap
- 2021: $70 billion market cap
- 2024: $120 billion market cap
Recent Developments
In December 2023, Tether publicly acknowledged its cooperation with multiple federal agencies. The company confirmed compliance with information requests from the Department of Justice, Internal Revenue Service, and Secret Service.
“The cryptocurrency has been used by third parties to fund illegal activities,” according to anonymous sources familiar with the current Manhattan US attorney’s investigation, as reported by the Wall Street Journal.
Implications for Cryptocurrency Investors
The ongoing investigations highlight the increasing regulatory focus on stablecoins, particularly regarding:
- Anti-money laundering compliance
- Reserve backing verification
- Transaction monitoring
- Cooperation with law enforcement
USDT’s widespread adoption in cryptocurrency markets makes these investigations particularly significant for investors, as the stablecoin serves as a crucial trading pair across major exchanges.
Law Enforcement Actions
Recent years have seen several notable enforcement actions involving USDT:
- February 2022: Authorities arrested two individuals for allegedly stealing cryptocurrency from Bitfinex
- August 2022: Boston US Attorney seized 73,586 USDT linked to criminal activities
- Multiple ongoing investigations by various US government agencies
These developments underscore the growing attention from regulatory bodies on cryptocurrency operations and their potential use in illegal activities.
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