Companies behind Tether allegedly used “shadowy intermediaries” to maintain their access to the global banking system.
According to a Mar. 3 report from The Wall Street Journal, companies backing Tether used falsified documents and shell companies to circumvent the banking system.
An email from Tether owner Stephen Moore detailed how one of Tether’s major traders in China provided fake sales invoices and contracts for each deposit and withdrawal. At the time, Moore had recommended abandoning efforts to open these accounts, deeming the process too risky.
“I would not want to argue any of the above in a potential fraud/money laundering case,” he said in the email reviewed by WSJ.
The report further stated that the Tether-associated companies hid their identities behind other businesses and individuals. Moreover, it alleged that Tether and its sister company Bitfinex unsuccessfully attempted to expand their bank access through the once crypto-friendly Signature Bank.
Although Signature closed two accounts associated with the firms, the bank approved an account for aviation fuel broker AML Global, controlled by Christopher Harborne, with the supposed intention of trading crypto on Kraken to hedge currency exposure. As it turns out, Harborne also goes by the name Chakrit Sakunkrit – a name that Signature had added to a list that was trying to evade money laundering controls. Sakunkrit also owned around 12% of Bitfinex and Tether.
Tether is the company behind the most widely traded stablecoin USDT, which currently boasts a market cap of $71 billion. With most market participants moving their assets into stablecoins amid recent volatility, it is hardly surprising that USDT is the most traded digital asset with $19 billion in daily trading volume.
The USDT-issuer responded to the WSJ’s allegations in a statement shortly after, labeling the report “wholly inaccurate and misleading.”
“Bitfinex and Tether are proud partners of global law enforcement, and routinely and voluntarily assist the United States Department of Justice and other law enforcement organizations across the world in preventing money laundering, terrorism, and other crimes by bad actors,” stated Tether.
This isn’t the first time Tether has refuted a report from media publications questioning the integrity of its operations. In November, Tether called Bloomberg’s report of a U.S. Department of Justice probe “blatant lies.”