Report: Tether Executives Face Criminal Probe into Bank Fraud

The US DoJ is probing whether executives behind the Tether digital token committed bank fraud during the nascent stages of its cryptocurrency business.

July 26, 2021, | AtoZ MarketsThe US Department of Justice (DoJ) has opened an investigation into the management of the company for the issue of stablecoins Tether with the prospect of opening a criminal case, writes Bloomberg, citing sources.

Tether suspected of committing bank fraud

The company is suspected of committing banking fraud. The US DoJ intends to investigate the activities that Tether conducted in the early years of its existence. In particular, he is interested in whether Tether was hiding the connection of its banking operations with cryptocurrencies.

Tether has routinely opened a dialogue with law enforcement, including the Justice Department, in line with our commitment to cooperation and transparency,” the company said.

In recent months, one source said the authorities had sent letters to individuals warning them that they were being investigated. These letters said that the decision to open the case could be made in the near future, after the Ministry of Justice established the validity of the charges.

In 2017, Tether and its affiliate exchange Bitfinex filed a lawsuit against the American bank Wells Fargo over blocking their transfers. They claimed that the bank was aware of their intention to purchase US dollars on behalf of clients to issue tokens. Subsequently, the companies dropped the claim and were forced to turn to banks in other jurisdictions to service their accounts.

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Read also: Tether Rejects Paper Naming USDT Manipulation

As noted by Bloomberg, the current investigation suggests that the investigation may have turned its attention to banking fraud away from the market manipulation that Tether has been imputed to in the past.

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