In a recent address at the PlanB event in Lugano, Switzerland, Tether’s CEO, Paolo Ardoino, responded to allegations made by The Wall Street Journal (WSJ) regarding a potential investigation by U.S. authorities into the company. The WSJ reported that the U.S. Department of Justice and the Treasury are examining Tether for possible violations of anti-money laundering (AML) laws and sanctions, particularly concerning the use of its stablecoin, USDT.
Ardoino firmly rejected these claims, stating, “As we told the WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.” He emphasized Tether’s ongoing cooperation with law enforcement agencies to prevent misuse of its digital assets and highlighted the company’s efforts to recover approximately $109 million from illicit activities since 2014.
During his presentation, Ardoino detailed Tether’s substantial reserve assets backing USDT, which include around $100 billion in U.S. Treasuries, over 82,000 Bitcoin valued at approximately $5.5 billion, and 48 tons of gold. This disclosure aimed to alleviate concerns amid rising fears surrounding the WSJ’s report.
The article suggested that federal prosecutors are investigating whether Tether’s services have been exploited for illegal activities such as drug trafficking and terrorism financing. Additionally, it mentioned potential sanctions from the Treasury Department due to USDT’s usage by sanctioned individuals and groups.
Tether has faced scrutiny before; however, Ardoino criticized the WSJ for what he termed “irresponsible reporting,” asserting that such articles often overlook Tether’s proactive measures against criminal activities. He pointed out that the company has established an External Investigations Unit staffed with former law enforcement officials to enhance its compliance efforts.
As the largest stablecoin issuer with a market capitalization reaching $120 billion in October 2024, Tether’s position is pivotal in the cryptocurrency market. The recent allegations have sparked volatility in crypto prices, highlighting how sensitive the market is to regulatory news involving major players like Tether.
Despite the turbulence, Ardoino remains optimistic about future regulatory landscapes post-2024 U.S. Presidential elections and continues to advocate for clearer crypto regulations that could benefit innovative firms in the industry.