Tether, which is the issuer of USDT (the world’s largest stablecoin), has strongly denied allegations made in a report by the Wall Street Journal, which accused the company of using falsified documents and shell companies to open bank accounts in 2018. Tether claims that the WSJ report is “wholly inaccurate and misleading”.
According to the WSJ report, Tether opened accounts under the names of executives from various companies in order to continue to be part of the global financial system.
The WSJ report also claimed that Tether and Bitfinex (which is a major crypto exchange) had at least nine bank accounts for shell companies in Asia. One of these shell companies was Crypto Capital Corp, which was identified as a shadow bank. The company held some of Tether’s funds, but was eventually shut down by authorities.
The report also cited an email allegedly sent by Stephen Moore, one of the owners of Tether Holdings, which stated that a major Tether trader in China was trying to bypass the banking system by providing fake sales invoices and contracts for each deposit and withdrawal. The Tether owner had reportedly signed some of the falsified documents, but acknowledged that this was too risky. He had further stated, “I would not want to argue any of the above in a potential fraud/money laundering case”.
Tether has responded to the report, stating that Bitfinex and Tether have “world-class compliance programs and adhere to applicable Anti-Money Laundering, Know Your Customer, and Counter-Terrorist Financing legal requirements”.
The stablecoin issuer also called the allegations made by the WSJ “unfair attacks”.
Paolo Ardoino, the CTO of Bitfinex and Tether, also commented on the report on Twitter, stating, “Love the obsession for Tether. I hope WSJ will not start asking Tether a rent. So far we lived rent free in their minds.”
It is worth mentioning that Tether’s executives were under investigation by the US Department of Justice for banking fraud, as per a Bloomberg report from 2021. Tether had responded by saying that the report was merely recycling old claims.
