Did Tether commit fraud to enter the banking sector?

In this post:

  • Tether fingered for fraudulent activities
  • The source says the company is on the DOJ’s radar
  • Tether’s controversial past catches up

Tether’s woes look like they are not going away soon, with the company in a fraud scandal. According to a report by WSJ, top shareholders backing the company made fake documents and shell companies to help the company enter the mainstream payment system. The source also mentioned that the parent company of USDT used various unclean methods to stay in the payment system and create accounts.

The source says the company is on the DOJ’s radar

According to an email, the source quoted a Chinese international who used various dubious documents to create an invoice for every transaction that was carried out. This allegation was confirmed in the email by one of the company’s top executives. The email also clarified that the executive had to let go of the Chinese international because the activity posed a lot of risk to the company.

The source also claimed that there are documents that stated that some of the backers of Tether used funds that had been confiscated from criminals to back the business. It also mentioned that the company is presently on the radar of the DOJ as investigations have intensified. Reacting to the report, Tether rubbished the allegations and asked WSJ not to mislead the public. The company finished its statement by noting that they have measures to combat all illegalities.

Tether’s controversial past catches up

Tether is behind one of the biggest digital assets and the largest stablecoin across the market. The asset presently holds a market cap of over $70 billion in today’s market. Traders prefer to use USDT to carry out trades as they can quickly enter and exit. This is because the asset is a digital representation of the physical dollar and is pegged to the currency on a 1:1 ratio. Tether is the most used asset outside America, especially in countries that have banned the use of the dollar.

The traders in the decentralized finance sector also use it to eliminate the need to pass their trades and transactions through the banking system. Tether has been a controversial entity for a while now, as the company still needs to provide documentation showing a reserve dollar kept in place for every USDT. The company was pushed out of New York in 2021 after an investigation uncovered that the USDT did not have reserve backing.

The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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