Sources: federal prosecutors are investigating Tether for possible violations of sanctions and anti-money-laundering rules; US Treasury is considering sanctions

The U.S. government is investigating cryptocurrency company Tether for possible violations of sanctions … Forums: Hacker News : Federal investigators probe Tether r/Buttcoin : Federal Investigators Probe Tether for Anti Money Laundering and Sanctions Violations r/CryptoCurrency : Federal Investigators Probe Cryptocurrency Firm Tether

Wall Street Journal 2024-10-26

Context & Ripple Effects

The reported inquiry extends a multiyear regulatory arc: federal authorities had previously been reported to be examining possible early-stage bank fraud by Tether executives, while U.S. and U.K. officials later reviewed more than $20B in Tether transactions tied to Moscow-based Garantex.

The story matters because it moves the focus from transaction-level sanctions-evasion concerns to the company itself. Tether's partnership with Chainalysis to flag risky addresses shows that compliance controls were already a central pressure point.

First-order effects

Tether faces heightened legal and compliance uncertainty from a reported federal prosecutorial investigation and the possibility that Treasury could impose sanctions.
The company’s screening, monitoring, and governance practices will receive more scrutiny, particularly where they bear on alleged sanctions or anti-money-laundering failures.

Second-order effects

Exchanges, trading firms, and other counterparties using Tether will have reason to reassess their compliance exposure and contingency plans while the Treasury decision remains unresolved.
The inquiry raises the value of transaction-monitoring and sanctions-screening tools across crypto intermediaries, since Tether had already adopted external address-risk monitoring.

Third-order effects

If enforcement increasingly targets stablecoin issuers rather than only individual illicit transactions, dollar-linked crypto infrastructure may be judged more directly on issuer-level compliance and controls.
The case is another test of whether major crypto firms can narrow the long-running gap between Tether's scale and regulatory transparency; the outcome remains uncertain because no sanctions action is reported.

The trend: Crypto oversight is shifting toward issuer-level accountability, with sanctions and anti-money-laundering controls becoming a core test of market legitimacy.

Discussion

@paoloardoino Paolo Ardoino on x
As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.
@paoloardoino Paolo Ardoino on x
At Tether, we deal regularly and directly with law enforcement officials to help prevent rogue nations, terrorists and criminals from misusing USDt. We would know if we are being investigated as the article falsely claimed. Based on that, we can confirm that the allegations in
@tether_to @tether_to on x
Tether Slams WSJ's Irresponsible Reporting, Stands by Strong Law Enforcement Track Record Learn more: https://tether.io/...
@functi0nzer0 Laurence on x
Imagine getting liquidated in 2024 by Tether FUD 😭
@tier10k @tier10k on x
DOJ is investigating cryptocurrency company Tether for possible violations of sanctions and AML rules The Treasury, meanwhile, has been considering sanctioning Tether because of its widespread use by individuals and groups sanctioned by the US https://www.wsj.com/...
@autismcapital @autismcapital on x
The Biden/Harris admin determined to do ANYTHING in their power to drive the Crypto voting block to TRUMP https://www.wsj.com/...
@satoshiflipper Satoshi Flipper on x
Who doesn't love a lil tether FUD, what's a cycle without it 😂
@lsdinmycoffee @lsdinmycoffee on x
hmmm twitter feed is all over the Tether FUD but to me it looks like it's simply the usual $SPX correlation, $BTC has been a perfect clone of SPX all day today... the big question is what will BTC do when the stock market closes very soon? [image]
@molly0xfff Molly White on x
EXCLUSIVE: BREAKING: Three years later, DOJ still investigating Tether
@tradermercury @tradermercury on x
it's 2024 nobody cares about your Tether FUD we've been here and done that 785 times already higher.
@krugermacro Alex Krüger on x
“As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. All stops gone.” Fixed it.
@adamscochran Adam Cochran on x
This is the more FUD take away from the article, but far less likely in my opinion. Because if the government OFAC'd Tether, then Tether would have to start market selling incredible amounts of US treasuries which are already on the ropes. Its a poison pill.
@nic__carter Nic Carter on x
Load ze tether FUD [image]
@dogetoshi Steven on x
Would be kind of ironic if the US Government sanctioning Tether is what ultimately makes it unbacked.
@zachxbt @zachxbt on x
@tier10k *US TREASURY HAS CONSIDERED SANCTIONING CIRCLE: WSJ Source: ZachXBT Fixed it for you
@adamscochran Adam Cochran on x
So second time this year we get to buy discounted dollars? 😅 Tether makes enough money they'll pay this, correct sanctions in oversight and move on. They don't want to lose the golden goose. 🤷‍♂️
@sherlock_hodles @sherlock_hodles on x
@paoloardoino Please do whatever you can to maintain the peg no matter how illegal it may be. Ty sir
@tier10k @tier10k on x
*US TREASURY HAS CONSIDERED SANCTIONING TETHER: WSJ Source: DB
@iamnomad @iamnomad on x
What if tether starts rage dumping US Treasuries?
r/Buttcoin r on reddit
Federal Investigators Probe Tether for Anti Money Laundering and Sanctions Violations
r/CryptoCurrency r on reddit
Federal Investigators Probe Cryptocurrency Firm Tether

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