What Will Tether Situation Mean for Crypto Saturday, October 26, 2024
What’s going on?
What Will Tether Situation Mean for Crypto The Wall Street Journal claims that Tether, the company that issues the stablecoin USDT, is under investigation by the U.S. federal government for possible violations of anti-money laundering and sanctions laws. Attorney’s Office in Manhattan, are looking into whether third parties have utilized Tether to finance illegal operations.
The significance of Tether
With a current market value of almost $120 billion, Tether, the company that issues the stablecoin USDT, provides a digital substitute for the US dollar. Due to its use as a dollar substitute in cryptocurrency marketplaces where traditional currencies are unavailable, USDT is the most traded cryptocurrency and ranks third in terms of value. An increasing stablecoin supply frequently indicates future market rises and suggests that investors have more purchasing power because stablecoins are the main conduits between fiat and digital assets.
Notably, Tether made $1.3 billion in USDT in August, just after Bitcoin fell to a five-month low of about $49,500. This shows how popular USDT is when markets are down.
What will happen to Tether next?
The Wall Street Journal claims that because Tether is used by sanctioned entities, the Treasury Department is thinking about imposing penalties on the company. According to the article, Tether’s investors have been looking into the company for a number of years for potential bank fraud. Tether responded that the piece contained “reckless allegations” without citing credible sources, calling it “irresponsible reporting.”
The company stressed that Tether is not aware of any ongoing investigations and that “no authorities have gone on record to confirm these rumors.” Additionally, Tether emphasized how it works with law enforcement to stop the abuse of its token, USDT, and other cryptocurrencies.