A recent Wall Street Journal (WSJ) article alleged that Tether Holdings used fabricated bills of sale and shell companies to withhold access to the global banking system in 2018 for its stablecoin, which is the largest in circulation. If confirmed, these allegations could amount to a violation of anti-money laundering (AML) laws at the very least.

According to an email purportedly sent by one of the owners, seen by the WSJ, some of Tether’s backers apparently provided fake bills of sale and contracts to circumvent the banking system in late 2018. Other documents would point to the opening of new accounts. using an altered company. Shadow names and intermediaries, including an organization with ties to terrorist organizations.

The blockchain company appears to be under investigation by the US Department of Justice, though the WSJ was unable to determine if this is in response to Tether’s attempts to open bank accounts in 2018. The US Attorney’s Office In Manhattan, which settled with Tether and Bitfinex (a sister organization) in a separate case in 2021, is overseeing the investigation.

Tether responded to the allegations by saying that the WSJ report was “totally inaccurate and misleading,” adding that Tether and Bitfinex compliance programs are fully compliant with AML and other legal requirements.

However, Tether’s credibility has previously been questioned. In 2021, the New York Attorney General found that Tether was not always backed 1-for-1 after lending money to sister crypto exchange Bitfinex to cover a shortfall. He banned her from trading in New York state and the Commodity Futures Trading Commission (CFTC) imposed a $41 million fine.

Until recently, it was claimed that a substantial proportion of Tether’s backing assets were in commercial paper. A Bloomberg report struggled to find evidence of that in the United States.