Tether Executives Face Justice Department Investigation Into Alleged Bank Fraud

United States Department of Justice (DOJ) is investigating whether Unite’s executives have committed bank fraud, however Bloomberg.

Federal prosecutors are focusing on the early days of Tether, where Tether is supposed to be able to hide cryptocurrency-related transactions from banks.

Three people close to the matter reportedly asked to remain anonymous. decrypt contacted Tether and we will update this article if we get a response.

What is Tether?

Tether is a stablecoin: type of cryptocurrency pegged to a coin. Tether says its stablecoin is backed by the US dollar.

If the Justice Department were to file criminal charges against Tether, it would likely mean one of the biggest steps forward in cracking down on the cryptocurrency industry, given Tether’s importance to the broader ecosystem. In theory, every time a user deposits a US dollar into Tether’s account, Tether, the company, mints a Tether, the stablecoin, in return.

While most of the cryptocurrency industry is prone to wild and unpredictable price swings, driving weary investors away from the inherent risks, Tether’s US dollar peg allows you to use the stablecoin to buy. and sell other cryptocurrencies. Right now, there are over $ 60 billion of Tethers in circulation.

Critics of Tether

This news comes about two months after Tether received intense criticism for breaking its reserves.

Also Read Solana, Dogecoin Hit Weekly Lows As Bitcoin Slows Pace

Despite previous claims that Tether was 100% cash backed, the data showed that less than 3% of Tether’s reserves were held in cash.

In light of news of the Justice Department investigation, Tether issued a statement saying the company “maintains an open dialogue with law enforcement, including the Justice Department, as part of our commitment to cooperation and transparency. ».

When Tether released its booking breakdown in May of this year, it was the first time these figures were released since 2014.

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