Bloomberg reported that more than three years after initial allegations of a federal probe into the cryptocurrency stablecoin Tether, the matter is still a “possible” criminal prosecution. Bitcoin’s price soared in response to the announcement, temporarily exceeding $40,000 for the first time since mid-June.
A stablecoin, unlike Bitcoin and other cryptocurrencies, connects its value to another asset — in this example, one US dollar — that is backed by real money or other assets. It allows traders to make decisions quickly without having to worry about market fluctuations. However, as many have pointed out, there are aspects of Tether’s past that don’t fit up to the tale it’s giving, dating back to 2014.
“It is business as usual at Tetherthat early history that the report claims prosecutors are focused on — specifically if Tether executives committed bank fraud and hid the nature of its cryptocurrency transactions from banks. In February, Tether and its owner Bitfinex reached a settlement with the New York Attorney General that included paying $18.5 million in penalties without admitting or denying accusations from the AG that the companies “made false statements about the backing of the ‘tether’ stablecoin, and about the movement of hundreds of millions of dollars between the two companies to cover up the truth about massive losses by Bitfinex.”
Tether termed the report a “repackaging of outdated charges” based on anonymous sources and past allegations in a statement. “As part of our commitment to collaboration, openness, and accountability, Tether frequently conducts open conversation with law enforcement agencies, including the United States Department of Justice… It’s business as usual at Tether, and we’re continuing to focus on how to best service our customers’ needs.”