DoJ Investigating Whether Tether (USDT) Executives Committed Bank Fraud - Report

The US Department of Justice (DoJ) is investigating executives of Tether (USDT), a stablecoin that is pegged to US Dollar, on whether they committed bank fraud. After years of investigations, the DoJ sent letters to these executives to notify them they’re targets of the investigation, Bloomberg reports.

The DoJ is reportedly inspecting executives’ actions years ago when the stablecoin was in its launching phase. They allegedly concealed from banks that transactions were linked to crypto.

A negative outcome for Tether, which was first issued in 2014, stemming from this investigation could have a broader impact on the entire cryptocurrency ecosystem.

Stablecoins, which are designed to bring more stability and be more immune to volatile price swings, is a very popular tool for trading cryptocurrencies.

“Tether routinely has open dialogue with law enforcement agencies, including the DOJ, as part of our commitment to cooperation and transparency,” the company said in a statement.

This news comes just months after a major cryptocurrency exchange Bitfinex, which has common owners and executives as Tether, and several Tether affiliates paid $18.5 million to settle claims from New York Attorney General Letitia James. The New York AG claimed that these companies didn’t report actual losses and lied that each USDT is backed by a single USD.

Bloomberg adds that the current number of USDTs in circulation is worth about $62 billion.

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