Tether fights FUD again
The Wall Street Journal reported that in late 2018, Tether and some of its partners tried to maintain access to the international banking system using fake companies and forged documents. Is Tether's reputation at risk again?
Tether's problems with the traditional banking system started in 2017 when Wells Fargo, an American bank with a branch in Taiwan, ceased processing Tether transactions on the island. The company filed a lawsuit, claiming that the loss of access to the traditional banking system threatened its existence. The lawsuit was later withdrawn, yet the director of strategy reassured users and investors that Tether always finds solutions to such challenges.
According to the WSJ, Tether has been utilizing illegal business practices for an extended period. This has resulted in the loss of funds, asset seizures, and possible ties to terrorist organizations. Here are some examples:
1. Tether opened new accounts under another company, Hylab Holdings Ltd., in Taiwan. These accounts were managed by Chris Lee, the executive director of Hylab Technology Ltd. Tether used this strategy to disguise its records as those of another company.
2. Tether and Bitfinex allegedly used a bank account in Turkey under the name Deniz Royal Dis Ticaret Limited Sirketi for money laundering purposes, with over $80 million passing through it. The company in question was declared a terrorist organization in the US, and some funds were seized. The investigation into this matter is ongoing and confidential.
3. In 2018, Bitfinex, which is linked to Tether, transferred over $1 billion to Crypto Capital Corp. without an agreement. Crypto Capital Corp. used shell companies to create bank accounts that processed cryptocurrency transactions without a license. As part of a criminal investigation, US and European authorities have seized Crypto Capital Corp.'s funds. As of now, Bitfinex is still fighting the seizure of funds claiming it was deceived.
4. Despite closing two Signature accounts, Tether and Bitfinex leaders did not give up on the bank. AML Global, an aviation fuel broker, requested to open an account managed by Christopher Harborne without disclosing that he was a Tether shareholder under a different name. After some suspicious activity, Signature Bank closed the account as the transactions were conducted with Bitfinex instead of Kraken. This was stated in the agreement.
5. Among Tether's partners is a major trading company in China that used fake contracts. Although one of Tether's owners signed these documents, he warned the partners about the risks associated with such actions.
US law enforcement agencies have not commented on these allegations. Tether itself previously stated that no investigations are ongoing against them.
So what's Tether's take on it?
Tether has released an official statement in response to the WSJ report, stating that the allegations are outdated and completely inaccurate. The company claims to have always cooperated with law enforcement agencies around the world to prevent financial crimes, adhering to KYC, AML, and counter-terrorist financing measures.
These unfair attacks will not distract us from continuing with those efforts and offering the most liquid and reliable stablecoin experience, which the market has clearly recognized by making us the leaders in the industry, – © Tether's official statement.
Paolo Ardoino, the CTO of Tether, didn't stay silent and responded to the investigation in a more sarcastic tone, writing on Twitter:
I am at the Plan B anniversary in Lugano. While I was on stage I heard some clown honks, pretty sure was WSJ. As always, tons of misinformation and inaccuracies. Poor guys, it must be difficult to be them but need better media.
