Bitcoin

Tether USDt

If <a href="https://blockhead.co/tag/luna?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">LUNA</a> taught us anything it&#39;s that stablecoins aren&#39;t always safe. But two years on from the catastrophic collapse of Terra, surely the likes of stablecoin giant <a href="https://blockhead.co/tag/tether?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">Tether</a> won&#39;t do a <a href="https://blockhead.co/tag/do-kwon?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">Do Kwon</a> on the industry. Or can it?According to the <a href="https://www.wsj.com/finance/currencies/federal-investigators-probe-cryptocurrency-firm-tether-a13804e5?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">Wall Street Journal</a>, the US federal government is investigating Tether for allegedly violating sanctions and anti-money laundering laws. Specifically, prosecutors in Manhattan are probing whether Tether has been used to support illegal activities like drug trafficking, terrorism, or hacking.Furthermore, the Treasury Department is also investigating sanctions against Tether due to its popularity among US-sanctioned entities like Hamas and Russian arms dealers.The probe comes on the heels of the company&#39;s record-breaking profits, with a staggering $5.2 billion in earnings for the first half of 2024 alone.According to recent reports, there has been a <a href="https://www.binance.com/en/square/post/2024-10-09-record-surge-in-stablecoins-and-bitcoin-transactions-may-signal-btc-price-increase-14629614515497?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">recent record surge</a> in the number of stablecoin transactions. Stablecoin liquidity surged to an all-time high of $169 billion at the end of last month, reflecting a 31% growth since the beginning of the year.Tether&#39;s <a href="https://www.blockhead.co/tag/usdt" rel="noopener noreferrer nofollow">USDT</a> maintained its leading position, with its market cap expanding by $28 billion to nearly $120 billion, representing 71% of the market. As the world’s most traded cryptocurrency, Tether sees about $190 billion traded daily.However, these transactions are linked to several U.S. national security concerns, including “the North Korean nuclear weapons program, Mexican drug cartels, Russian arms companies, Middle Eastern terrorist groups, and Chinese manufacturers of chemicals used to make fentanyl,” according to The Wall Street Journal.These allegations are nothing new either. Cyber Capital founder Justin Bons recently lashed out at Tether, describing it as &#34;one of the biggest existential threats to crypto as a whole&#34; and a &#34;118 billion dollar scam; bigger than FTX &amp; Bernie Madoff combined.&#34; Tether&#39;s market cap has since <a href="https://coinmarketcap.com/currencies/tether/?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">risen</a> to $120 billion.Bons accuses the USDT issuer of printing counterfeit money, falsifying documents, obscuring identities, and lying about reserves. &#34;No proof of reserves and an audit have ever been done,&#34; he said.“This means we have to take their word for the vast majority of reserves, as they cannot be independently verified. The first firm to attempt an audit even got fired for being too thorough in 2018!”Although Bons&#39; remarks were made over a month ago, they seem timingly relevant as Tether recently revealed its reserve breakdown. Speaking at Lugano’s PlanB event in Switzerland, Tether CEO Paolo Ardoino <a href="https://cointelegraph.com/news/tether-ceo-breaks-down-reserves-backing-usdt-stablecoin?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">revealed</a> that Tether holds $100 billion in US treasuries and more than 82,000 Bitcoin valued at $5.5 billion.&#34;All Tether tokens are pegged at 1-to-1 with a matching fiat currency and are backed 100% by Tether’s Reserves,&#34; Tether&#39;s <a href="https://tether.to/en/transparency/?tab&#61;usdt&amp;ref&#61;blockhead.co" rel="noopener noreferrer nofollow">website</a> states.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/1ba7e6f868684160803949429b9df8d8.png" />Ardoino blamed the Wall Street Journal article for causing FUD around the token. On X, he refuted the article&#39;s claims, stating &#34;As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.&#34;&#34;We deal regularly and directly with law enforcement officials to help prevent rogue nations, terrorists, and criminals from misusing USDT. We would know if we are being investigated as the article falsely claimed. Based on that, we can confirm that the allegations in the article are unequivocally false.&#34;In the article itself, the Wall Street Journal quoted Tether as dismissing the allegations. “To suggest that Tether is somehow involved in aiding criminal actors or sidestepping sanctions is outrageous,” the Wall Street Journal quoted Tether as saying, “We work actively with U.S. and international law enforcement to combat illicit activity.”The Justice Department&#39;s scrutiny of Tether nonetheless began years ago, initially focusing on alleged bank fraud by Tether backers. Tether bolstered oversight of how its cryptocurrency is used, claiming the transparency of blockchain makes it difficult for criminal activity to go undetected. Tether even paid $61 million in a prior settlement over accusations of misrepresenting the assets backing its currency.Recently,  Tether revealed plans to explore lending opportunities in the commodities trading sector. The move is seen as a direct response to the challenges faced by smaller commodity trading firms, who often struggle to secure the necessary credit lines from traditional lenders. Tether&#39;s involvement could offer a lifeline, providing a less regulated and potentially more flexible funding option.With billions in reserves, Tether is looking for new ways to deploy its capital. The commodities market, with its vast array of assets and complex trading dynamics, presents a compelling opportunity.

Tether Confirms BTC Reserves But Is USDT Still a $120B Scam Amid US Probe?

Blockhead

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