Tether CEO Denies Reports Amid U.S. Investigations and Potential Sanctions

Paolo Ardoino, CEO of Tether, has refuted claims regarding an investigation by lawmakers into the major cryptocurrency company over alleged violations of anti-money-laundering and sanctions laws. The reports, initially detailed by The Wall Street Journal, suggest that the investigation—led by Manhattan prosecutors—aims to determine whether Tether’s stablecoin, USDT, has been used to facilitate illegal activities, including drug trafficking and terrorism, or to launder money linked to these crimes.

At the same time, the U.S. Treasury Department is reportedly considering imposing sanctions on Tether. Such sanctions could restrict American individuals and businesses from engaging with the company, particularly in light of allegations that USDT has been used by sanctioned entities, including Russian arms dealers and the terrorist group Hamas.

Previous Criticisms of Tether

This controversy is not the first challenge Tether has faced. In September, Consumers’ Research published a report criticizing the company for its lack of transparency and failure to complete a full audit of its dollar reserves, despite commitments made since 2017. The report drew comparisons between Tether’s operations and those of the collapsed cryptocurrency exchange FTX, raising concerns about Tether’s alleged involvement in circumventing international sanctions, particularly in regions like Venezuela and Russia.

Tether operates as a stablecoin, meaning its value is pegged to the U.S. dollar. This characteristic offers stability that is attractive in areas where access to the dollar is limited or banned. With approximately $190 billion worth of Tether traded globally each day, it is the most widely used cryptocurrency in the world.

While Tether has denied any involvement in illegal activities, the company has taken measures to mitigate potential misuse of its stablecoin. This includes partnerships with firms specializing in transaction tracking to enhance compliance and address concerns regarding illicit use.

As Tether continues to navigate these challenges, its actions and responses will likely shape its standing within the broader cryptocurrency landscape.