Tether CEO Paolo Ardoino has debunked claims that the US Department of Justice (DoJ) is investigating the stablecoin issuer, calling the report an old noise.
Ardoino took to X on Friday to discard the speculation, noting that there were no indications that US prosecutors were scrutinizing Tether. Notably, the claims came after the Wall Street Journal released a report citing a possible investigation into the stablecoin issuer.
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
For context, the Friday report from WSJ claimed that the US DOJ was investigating Tether over its role in money laundering. It noted that the scrutiny, which has gone on for several years, questioning the use of the largest stablecoin by market cap for fraudulent activities.
Furthermore, WSJ reported that US prosecutors were considering sanctioning the crypto firm due to its alleged extensive involvement in fraud. It also noted that over $190 billion USDT was traded daily, and a chunk of it aided terrorist groups like Hamas.
Tether Calls Report Irresponsible
Notably, the stablecoin issuer also took to its blog to debunk the rumors, branding them “irresponsible” and “reckless allegations.” Although WSJ cited people familiar with the matter, Tether noted that the publication lacked credibility and came from mere speculations.
Tether insisted that it had a well-documented and cooperative relationship with law enforcement, well detailed in its periodic reports. Furthermore, the crypto firm stated that it has aided in apprehending cybercriminals and fraudsters.
It bears mentioning that Tether recently announced a collaboration with the Tron network to launch the T3 Financial Crime Unit (FCU), a firm solely focused on combating cybercrimes. The team had frozen illicit funds worth $12 million at the launch in early September.
Market Grapple Following Investigation Rumors
Following the release of the WSJ report, the crypto market saw intense downside volatility, pushing Bitcoin to $66,000. The short-lived capitulation also affected altcoins, with Ethereum and Solana dumping to $2,391 and $160, respectively.
Meanwhile, the price action spiked position liquidation, as the crypto derivative market has seen over $390 million worth of rekt positions in the past 24 hours. The concentration of the liquidation heatmap was on Bitcoin, Ethereum, and Solana, where its traders lost $67.3 million, $62.21 million, and $27.79 million, respectively.
At the time of writing, Bitcoin has recovered above $67,000, Ethereum trades at $2,461, and Solana exchanges hands at $166 per coin.
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