Department of Justice Revamping Investigations into Tether USDT – Here’s What You Need to Know

The US Department of Justice has revamped a probe into whether Tether’s executives committed bank fraud in the early days of the stablecoin. 

According to a Bloomberg report, the investigation has been transferred to another team within the DOJ and is now directed by US Attorney Damian Williams of Manhattan in the Southern District of New York (SDNY). 

In July last year, Bloomberg claimed federal prosecutors in Washington were investigating whether top officials at Tether hid the nature of its crypto-related transactions and deceived its banking partners during the fledgling days of its business.

“But after months of legal wrangling, the case has been transferred within the department, according to people familiar with the matter,” the report said, adding that Williams, who has been one of the most “aggressive” in pursuing suspected cryptocurrency crimes, took over the inquiry in recent weeks.

Citing former federal prosecutors, Bloomberg said that it is pretty unusual to transfer an investigation after it’s reached such a late stage, adding that it underscores the uncertain legal terrain in the rapidly developing realm of digital currencies.

Transferring cases “doesn’t happen often and there’s going to be pretty individual, unique circumstances each time,” Robertson Park, a partner at Davis Wright Tremaine who previously spent two decades in the Justice Department’s fraud section, reportedly said.

Tether Says the Report is Not Factual

In a blog post published Monday, Tether lashed out at the media outlet, claiming that a DOJ probe into the stablecoin provider is not factual. The company said it has been in constant contact with the federal department but has not discussed anything related to an investigation for “well over a year.”

“This is Bloomberg recycling old news that isn’t even factual,” said the company. “This represents yet another example of their incompetent journalism and inability to separate fact from falsity.”

Tether added that the company and its sister company, Bitfinex, “have actually been identified as victims in the Fowler case that Bloomberg references.” As per the Bloomberg report, prosecutors began filing charges in 2019 against Reginald Fowler, claiming that he opened up several accounts at US banks by falsely claiming they were for real estate investment.

As reported, in early 2021, Tether and Bitfinex paid $18.5 million to settle a nearly two-year-long investigation with the New York Attorney General’s Office (AOG) and resolve allegations about public disclosures related to a loan Tether made to Bitfinex. 

Tether (USDT) is the world’s largest stablecoin in terms of market capitalization. As of now, the token has a market cap of over $69 billion, down from its all-time high of around $84 billion.