Crypto Firms Behind Tether Allegedly Used Falsified Documents
Crypto Companies Behind Tether Allegedly Used Falsified Documents and Shell Companies
The Wall Street Journal has reported that Tether Holdings Limited and its related crypto broker, Bitfinex, allegedly used falsified documents and shell companies to launder money raised by a terrorist group. The news comes as a further blow to the growing stablecoin maker and its affiliates.
According to an investigation by the WSJ, a Twitter account belonging to “Walter Bloomberg” – reportedly linked to Tether Holdings and Bitfinex – was used to launder money for a terrorist group. The account was used to receive funds in the form of Bitcoin, then convert it into Tether tokens and distribute the proceeds to other accounts. It is alleged that Tether and Bitfinex used fake documents and shell companies to hide their connections to the money laundering scheme.
Crypto: Tether Denies Involvement in Money Laundering
In response to the report, the company has denied involvement in money laundering. In an official statement, Tether said: “We have conducted an extensive investigation of the allegations and can confirm that Tether Holdings Limited has not been involved in any money laundering activities. Furthermore, no funds have diverted from Tether reserves.”
Meanwhile, a spokesperson for Bitfinex has also denied involvement in money laundering. However, they did admit that the scope of the WSJ’s investigation was limited, claiming that other crypto exchanges were not included in the report. They also claimed that the report failed to consider other processes to ensure funds are not laundered.
Increasing Regulatory Pressure
The news of Tether and Bitfinex’s alleged involvement in money laundering has increased regulatory pressure on the companies. Several government agencies, including the US Department of Justice, are reportedly investigating the companies for possible anti-money laundering (AML) laws violations.
In addition, several exchanges have suspended trading Tether tokens due to the allegations. These include Bittrex, Huobi, and OKEx.
It remains to see the outcome of the investigations into Tether and Bitfinex. However, the news of the alleged money laundering scheme has caused significant damage to the companies’ reputations and could lead to further regulatory scrutiny. Whether or not the companies can weather the storm remains to be seen.
