More than three years after the first reports of a federal investigation into the cryptocurrency stablecoin Tether, Bloomberg reports that it remains a “potential” criminal case. In response to the report, Bitcoin’s price surged, briefly climbing above $40,000 for the first time since mid-June.
Unlike Bitcoin or other cryptocurrencies, a stablecoin links its value to another asset – which in this case is one US dollar – backed by real money or other assets. It is useful for traders to make instant moves without worrying about rapid swings in the market. However, like many have documentedGoing back to 2014 when Tether was introduced, there are parts of its history that don’t match the story it tells.
It is that early history that the report claims prosecutors are targeting — particularly if Tether executives committed bank fraud and hid the nature of its cryptocurrency transactions from banks. In February, Tether and its owner Bitfinex reached a settlement with the New York Attorney General that included paying $18.5 million in fines without admitting or denying allegations by the AG that the companies “made false statements about support for the ‘tether’ stablecoin, and about the movement of hundreds of millions of dollars between the two companies to get the truth about huge losses from Bitfinex.”
In a statementTether called the story a “repackage of old claims” based on unnamed sources and old allegations. The company says: “Tether routinely conducts open dialogue with law enforcement agencies, including the US Department of Justice, as part of our commitment to collaboration, transparency and accountability… It’s business as usual at Tether and we remain focused on how we do it. best meet the needs of our customers.”