The company behind stablecoin Tether (USDT) has rebuffed a report by The Wall Street Journal (WSJ) claiming it had ties to entities that faked documents and used shell companies to maintain access to the banking system.
On Mar. 3 the WSJ reported on leaked documents and emails purportedly revealing that entities tied to Tether and its sister cryptocurrency exchange Bitfinex faked sales invoices and transactions and hid behind third parties in order to open bank accounts they otherwise may not have been able to open.
In a Mar. 3 statement, Tether called the findings of the report “stale allegations from long ago” and “wholly inaccurate and misleading,” adding:
“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 firm went on to say that it was a “proud” partner with law enforcement and “routinely and voluntarily” assists authorities in the United States and abroad.
Tether and Bitfinex chief technology officer, Paolo Ardoino, tweeted on Mar. 3 that the report had “misinformation and inaccuracies” and insinuated the WSJ were clowns.
I’m at the PlanB anniversary in #lugano
So much energy and people excited to talk about #Bitcoin
While I was on on stage I heard some clown honks, pretty sure was WSJ.
As always ton of misinformation and inaccuracies. Poor guys, must be difficult be them but need better media.
– Paolo Ardoino (@paoloardoino) March 3, 2023
Cointelegraph contacted Tether and Binfinex for comment on the report and their statement but did not receive a response by the time of publication.
WSJ report claims Tether and Bitfinex obscured itself
The WSJ’s report outlines – through its reported review of leaked emails and documents – Tether and Bitfinex’s apparent dealings to stay connected to banks and other financial institutions which, if lost, would be “an existential threat” to their business according to a lawsuit filed by the pair against Wells Fargo bank.
One of the leaked emails suggests the firm’s China-based intermediaries were attempting to “circumvent the banking system by providing fake sales invoices and contracts for each deposit and withdrawal.”
Screenshot of headline from Wall Street Journal. Source: Wall Street Journal
There were also accusations in the report that Tether and Bitfinex used various means to skirt controls that would have restricted them from financial institutions, and had links to a firm that allegedly laundered money for a United States-designated terrorist organization, among others.
Meanwhile, a person familiar with the matter also told the WSJ that Tether has been under investigation by the Department of Justice (DOJ) headed by the U.S. Attorney’s Office for the Southern District of New York. The nature of the investigation could not be determined.
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Tether has faced multiple allegations of wrongdoing over the past few months and recently had to downplay a separate WSJ report in early February that claimed four men controlled approximately 86% of the firm since 2018.
It similarly had to combat what it called “FUD” (fear, uncertainty, and doubt) from a December 2022 WSJ report concerning its secured loans and subsequently pledged to stop lending funds from its reserves.