Tether CEO slams claims of federal probe: 'No such investigation makes sense'

• Tether faces investigations into illegal activities and alleged ties to affiliated entities.
• Despite the scrutiny, Tether explores growth opportunities in the commodity sector.

Stablecoins have emerged as a transformative force in the cryptocurrency landscape this year, particularly highlighted by the competition between Circle's USDC and Tether's USDT.

Visa on-chain analysis also indicates that USDT recorded a transaction volume of $6.47 billion, significantly surpassing USDC's $2.08 billion as of October 27.

Bonds under threat?

Amid this surge in USDT's popularity, the Wall Street Journal reported that the US Attorney's Office in Manhattan is investigating USDT for possible involvement in illegal activities, including drug trafficking, terrorist financing, and money laundering.

However, things took a different turn when Tether's CEO claimed there were no signs of a federal investigation.

Regarding X, Tether CEO Paolo Arduino noted,

“As we told the WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”

Tether echoed this sentiment, saying,

“These stories are based on pure speculation although Tether has confirmed that it has no knowledge of any such investigation at the company.”

They added,

“The article also carelessly glosses over Tether's well-documented and extensive dealings with law enforcement to crack down on bad actors seeking to abuse Tether and other cryptocurrencies.”

However, the WSJ strongly suggested that investigators are looking into whether the stablecoin inadvertently facilitated transactions for authorized entities.

What's up with Tether?

For those who don't know, US prosecutors were investigating the stablecoin provider's alleged involvement in illegal activities, particularly related to affiliated groups such as Russian arms dealers.

In addition, the Treasury Department was considering restrictions that would prevent US citizens from transacting with USDT, which boasts an impressive daily trading volume of $190 billion. Concerns about Tether's connection to national security issues, including North Korea's nuclear ambitions and ties to Mexican drug cartels, have intensified scrutiny of the stablecoin.

In light of these allegations, Tether has strongly denied any wrongdoing, voicing its commitment to cooperate with law enforcement and recent compliance measures. This includes freezing 1,850 wallets and strengthening its regulatory framework by hiring experts.

What else is it?

The investigation compared the operational practices of Tether and FTX. More worrisome are doubts about its business model and adherence to regulations. Reports also indicate that USDT has enabled users in countries such as Venezuela and Russia to bypass sanctions. This has raised concerns about possible misuse of USDT by state-owned enterprises and criminal organizations.

Despite ongoing scrutiny surrounding its operations, USDT is actively pursuing several strategic developments for the coming year.

Recent reports have indicated that stablecoin issuers are considering entering the commodity sector, which could provide significant opportunities for growth.

If successful, this initiative could enable USDT to capitalize on credit-starved businesses This would position Tether as a key player in a new market while potentially improving its revenue streams.