Tether: DOJ Renews Investigation Into the Company
The U.S. Department of Justice (DoJ) is reviewing an investigation into whether Tether executives committed bank fraud following the creation of the stablecoin.
According to a Bloomberg report, the investigation has been transferred to another team within the DoJ and is now being led by the U.S. Attorney for the Southern District of New York, Damien Williams.
Last July, Bloomberg claimed that federal prosecutors in Washington were investigating whether high-ranking Tether officials hid the nature of cryptocurrency-related transactions and misled banking partners in the early days of its business.
“But after months of legal wrangling, the case has been transferred within the department, according to people familiar with the matter“, the report said, adding that Williams, who has been one of the “most aggressive” in pursuing alleged cryptocurrency-related crimes, has taken over the investigation in recent weeks.
Citing former federal prosecutors, Bloomberg said it was highly unusual to transfer an investigation after it had reached such a late stage, adding that it underscored the uncertain legal terrain in the rapidly evolving digital currencies sphere.
Transferring cases “doesn’t happen often, and each time there will be fairly individual, unique circumstances“, said Robertson Park, a partner at Davis Wright Tremaine who previously spent two decades in the Justice Department’s fraud division.
Report under scrutiny
In a blog post shared on Monday, Tether fired back at the media outlet, saying the DOJ investigation into the stablecoin provider is not factual. The company said it has been in constant contact with the federal department but has not discussed anything related to the investigation for “well over a year.”
“This is Bloomberg recycling old news that isn’t even factual“, the company said. “This represents yet another example of their incompetent journalism and inability to separate the facts from the lies.”
Tether added that the company and its sister company Bitfinex “have in fact been identified as victims in the Fowler lawsuit referenced by Bloomberg“. According to the media outlet’s report, in 2019, prosecutors began filing charges against Reginald Fowler, alleging that he opened several accounts at US banks, falsely claiming they were for real estate investments.
As reported, in early 2021, Tether and Bitfinex paid $18.5 million to settle a nearly two-year investigation with the New York Attorney General’s Office and resolve public disclosure allegations related to a loan Tether made to Bitfinex.
Tether (USDT) is the largest stablecoin in the world in terms of market capitalization. At the time of writting, the token’s market value is over $69 billion, down from a record high of around $84 billion.