Tether Responds to Reports of New Bank Fraud Investigation at DOJ

A DOJ investigation into suspected bank fraud at Tether – issuer of the world’s largest stablecoin, USDT – has reportedly been transferred to another team within the department, according to a Monday article from Bloomberg.

Tether, however, has claimed that the information presented in the article is inaccurate, and a case of “sensationalized journalism.”

Bloomberg’s Report

As reported by Bloomberg, the alleged probe is now led by US Attorney Damian Williams of Manhattan. 

Williams is known to have aggressively pursued cases of suspected crypto crime in the past, recently securing a guilty plea from someone affiliated with one of Tether’s payment processors.

Bloomberg said investigators warned Tether that the company could be charged with bank fraud in July of last year. Prosecutors were reportedly investigating whether Tether hid the nature of its crypto transactions during its early days, which would constitute a crime. 

The outlet now reports that the case was transferred after months of “legal wrangling,” according to people “familiar with the matter” who “asked not to be identified” for confidentiality reasons. 

Federal prosecutors said that decisions to transfer investigations like this are unusual, but may have been deemed necessary due to the Southern District of New York’s experience in tackling related crimes. 

“Passing crypto cases to certain offices could become more common and makes sense,” said Robertson Park, a partner at Davis Wright Tremaine. “There’s a steep learning curve for folks who get involved in these investigations and probably a fairly limited number of people who have real experience and understanding.”

Tether Tells a Different Story

Contrary to Bloomberg’s claims, Tether said on Monday that the company has been in constant contact with the Department of Justice, but has not discussed anything related to an investigation for “well over a year.”

It clarified that the DOJ is not currently investigating Tether and that the firm was identified as a victim – alongside Bitfinex – in one of the lawsuits referenced by Bloomberg.

“This is Bloomberg recycling old news that isn’t even factual,” said the company. “This represents yet another example of their incompetent journalism and inability to separate fact from falsity.”

Tether has had a rocky relationship with Bloomberg in the past, repeatedly criticizing what it calls “years-old headlines” from the outlet. Back in 2021, the firm called Bloomberg’s report about the initial DOJ probe “clickbait.”