Tether, the issuer of stablecoin USDT, has once again drawn ire from the US Department of Justice (DOJ). This time, however, the regulator may start a prosecution.
The US authorities suspect Tether of fraud and covering up the nature of its cryptocurrency activities. This is not the first time that the stablecoin issuer has been on the receiving end of severe scrutiny. The company risks facing criminal prosecution. The analysis of Tether's early activities will determine its fate. The Department of Justice hopes to find evidence of concealing cryptocurrency transactions by Tether.
The federal prosecutor probed into Tether’s activities back in 2019 when the firm granted a loan to Bitfine. The conflict was settled when the two companies reached an agreement to pay an $18.5 million fine with the New York Attorney General Office. Nevertheless, Tether continued to draw regulators’ attention. In June, Federal Reserve Bank of Boston President Eric Rosengren called USDT the new disruptor to short-term credit markets. Later, Treasury Secretary Janet Yellen urged US authorities to establish a regulatory framework for stablecoins. According to Yellen, financial watchdogs plan to issue recommendations in the coming months for fixing any regulatory gaps around stablecoins.
In response, Tether called the reports of an alleged DOJ probe a clickbait based on unnamed sources and stale, years-old allegations.
