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Tether FUD recycled as DOJ is allegedly probing the executives over possible bank fraud

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TL;DR Breakdown

  • The US Department of Justice is allegedly probing Tether executives for dubious bank-related transactions. 
  • Some people have dismissed the development as a recycled “Tether FUD,” while some are curious to know how this case will unfold in the future.  

A new report from Bloomberg alleged that the United States Department of Justice (DOJ) is probing Tether Inc., the company behind the largest stablecoin USDT, over possible bank fraud.  This newest development on “Tether FUD” is coming about five months after Tether and its sister company, Bitfinex, settled its years-long case with the New York Attorney General. 

Tether FUD resurfaces

As Bloomberg reported, citing three people familiar with the matter, the DOJ is pushing to ascertain if the executives at Tether committed bank fraud. They are “scrutinizing whether Tether concealed from banks that transactions were linked to crypto,” the insiders precisely noted. 

Note that the alleged investigation is based on events that happened during the early years of Tether. Hence, many industry players aren’t surprised by the development and have only likened it to be another recycled “Tether FUD.” 

Tether has been in fierce scrutiny with regulators amid shady transactions that happened several years ago. This has got many crypto investors worried that the market would be affected severely if Tether is faulted and USDT cracked down. Notably, USDT is the largest and most traded stablecoins in the crypto market. 

The number of USDTs in circulation accounts for over $60 billion of the total crypto market cap. 

Meanwhile, in February, Tether FUD subsided after Tether and Bitfinex settled with the NYAG. Both companies agreed to pay a penalty of  $18.5 million to the authorities, which ended their years-long case, wherein NYAG accused Bitfinex exchange of secretly covering a loss of $850 million using Tether’s funds. 

Market Reaction

People are now curious to know how the development will unfold and what will be the fate of the USDT, Bitcoin, and the entire crypto market based on the fact that USDT plays a significant role in the market. 

Shortly after the announcement on Bloomberg, Bitcoin almost cleared its value to $38,000. However, it’s trading at $38,641 on CoinMarketCap, during press time. 

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Ibiam Wayas

Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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