US DOJ Revises Probe into Tether Regarding Bank Fraud - Report

The United States Department of Justice has reopened a probe into Tether Holdings according to a report from Bloomberg citing anonymous sources close to the probe.

Per the report, the probe is into allegations seeking to know if Tether violated any form of bank rules with respect to the movement of cash under false pretences.

The sources said the case has been transferred to the District Office in the Southern District of New York, where attornies like Damian Williams, renowned for investigating the highest profile cases in the digital currency ecosystem, operate from. 

While Federal Prosecutors had informed Tether’s executives over a year ago that they may be probed in relation to some banking violations, the investigation report, if confirmed, will be the first proactive move to probe the regulators will be making in that regard in a while.

The transfer of the cases between DoJ Departments is an unusual move, showcasing the dynamics of the legal loopholes in the digital currency ecosystem that is still evolving. The current probe is centred on the partnership between Tether and Crypto Capital after the stablecoin issuer lost its banking relationships in the US, preventing its ability to access US to process its transactions.

One of Crypto Capital’s executives, Reginald Fowler, had already pleaded guilty to offences relating to false representations to obtain USD for its business activities. It is not clear whether the current investigation will involve Crypto Capital at this time.

Tether has issued a statement refuting claims that it is currently under investigation, saying that no officials have gotten in touch in more than a year.

“Tether executives have had no interactions with the DOJ in connection with any investigation for well over a year and the DOJ does not appear to be actively investigating Tether,” it wrote in the statement. 

With Tether known to resolve some of its past probes through settlement with the New York Attorney General’s (NYAGs) office, the firm said it will continue to foster transparency in its product offerings.