U.S. officials are examining whether Tether committed bank fraud, according to Bloomberg.
Any criminal proceedings would send shockwaves through the crypto market, not least because of Tether now plays a starring role in the crypto ecosystem.
Boasting a market cap of $61.8 billion, Tether is one of the biggest cryptocurrencies in terms of valuation, and it’s unquestionably the market leader when it comes to stablecoins.
However, Tether has come under scrutiny in recent years — namely surrounding the issue of whether all of the stablecoins in circulation are fully backed by dollars that are held in reserve.
Bloomberg’s report suggests that the U.S. Justice Department probe centers on the conduct that occurred years ago, back in the early days of Tether’s operations.
Its sources suggest that prosecutors are examining whether crypto-related transactions were concealed from banks. In a statement, Tether told the news outlet:
“Tether routinely has open dialogue with law enforcement agencies, including the DOJ, as part of our commitment to cooperation and transparency.”
Official Audit is Coming
Last week, two Tether executives confirmed that Tether will be subject to an official audit within months.
Although general counsel Stuart Hoegner stressed in a CNBC interview that USDT is fully backed by reserves, he did confirm that this isn’t purely cash. Instead, they also consist of things like secured loans, bonds, cash equivalents and exposure to Bitcoin.