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The U.S. federal government is reportedly investigating stablecoin issuer Tether, according to an Oct. 25 article from The Wall Street Journal, which cited sources “familiar with the matter.” Tether CEO Paolo Ardoino dismissed the report as “old noise,” but the news still unsettled the cryptocurrency market.
The report states that the U.S. Attorney’s Office for the Southern District of New York, part of the Justice Department, is conducting a criminal investigation into whether Tether’s USDT has been used by third parties to fund illicit activities or launder proceeds from those activities. This investigation has allegedly been ongoing for “several years.”
At the same time, the Treasury Department is reportedly considering sanctions against Tether, citing its “widespread use by individuals and groups sanctioned by the US, including the terrorist group Hamas and Russian arms dealers.” The Wall Street Journal estimated that up to $190 billion in USDT is traded daily.
In response, Tether stated, “To suggest that Tether is somehow involved in aiding criminal actors or sidestepping sanctions is outrageous.” The company further criticized the article on its website: “It is wildly irresponsible for WSJ to write articles with reckless allegations…when no authorities have gone on the record to confirm these rumors.”
Tether’s CEO Paolo Ardoino also addressed the report, stating in an X post, “As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”
Tether has faced consistent criticism from organizations such as the United Nations and various consumer protection groups. In October 2021, the Commodity Futures Trading Commission fined Tether and its affiliate Bitfinex a combined $42.5 million for violations of the Commodity Exchange Act.
Ripple CEO Brad Garlinghouse commented in May, “The US government is going after Tether, that is clear to me,” though he didn’t elaborate.
Since its launch in 2014, Tether has reported assisting over 145 law enforcement agencies in recovering more than $108.8 million in USDT linked to illegal activities.
The investigation report has affected the broader crypto market, with Bitcoin falling from $67,367 to $66,016, and other major cryptocurrencies like Ether, BNB, Solana, and XRP showing similar declines.

US Investigation Into Tether Unnerves Crypto Markets

Crypto Intelligence

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