WSJ Links Tether to Terrorist Groups and Arm Dealings; Tether Dismiss It As Old News!

Tether is biting back on The Wall Street Journal (WSJ) for an article the news media is writing on Tether, speculating that the company is under investigation by the U.S federal government. Tether CEO Paolo Ardoino has dismissed the claims as “old noise,” yet the news stirred anxiety within the cryptocurrency markets.

WSJ insinuations and accusations

According to the WSJ report, the Justice Department’s U.S. Attorney’s Office for the Southern District of New York has been conducting a criminal investigation for several years.

The investigation is focused on Tether's USDT stablecoin, which the WSJ has insinuated was often used to fund illicit activities, or launder money generated by those activities.

In the report, WSJ wrote:

"The Treasury Department is considering sanctioning Tether because of its widespread use by individuals and groups sanctioned by the US, including the terrorist group Hamas and Russian arms dealers."

The Wall Street Journal even speculated that up to $190 billion in USDT is traded daily.

Tether slams WSJ for irresponsible reporting

Responding to all these allegations and speculations made by the WSJ, Tether had called all this speculation about its company aiding terrorist groups completely outrageous. In a blog post on its website, Tether said:

"It is wildly irresponsible for WSJ to write articles with reckless allegations with such certainty when no authorities have gone on the record to confirm these rumors, and no sources are named."

Tether has also called out WSJ for deliberately leaving out the well documented and extensive dealing Tether had with law enforcement to crack down on bad actors seeking to misuse tether and other cryptocurrencies.

Tether CEO Paolo Ardoino also dismissed all these claims by the WSJ. In an X post, he wrote,

"As we told WSJ, there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop."

The Wall Street Journal highlighted Tether’s statement in response: “To suggest that Tether is somehow involved in aiding criminal actors or sidestepping sanctions is outrageous.” Tether’s website statement went further, condemning the article for its “reckless allegations” based on unnamed sources and underscoring Tether’s history of cooperation with law enforcement.

Ardoino further dismissed the claims in a social media post, stating, “There is no indication that Tether is under investigation. WSJ is regurgitating old noise.”

What concrete evidence do we currently have right now?

But WSJ is not the first to make such claims about Tether. In the beginning of 2024, the Southeast Asia and the Pacific division of the United Nations office for Drugs and Crime (UNOCDC) also issued a report on the use of cryptocurrencies in illegal activities and underground banking.

In the report titled "Casinos, Money Laundering, Underground Banking and Transnational Organized Crime in East and Southeast Asia", it wrote that USDT has become one of the primary vehicles for money laundering in the region.

Tether responded to the report by shooting back at the UN saying that the agency had ignored the traceability of USDT and disregarded its proven record of collaborating with law enforcement worldwide.

It further adds that "The UN should also discuss how centralized stablecoins can improve anti-financial crime efforts."

Similarly, non-profit organisation, Consumer's Protection, has also launched a multimillion-dollar advertising campaign using television spots, billboards and other forms of outreach to bring attention to the Tether stablecoin's business practices.

In a 30 seconds campaign video created by the non-profit organisation, they even question the viewers if Tether could be the next FTX?

Tether and the the affliliated crytocurrency exchange Bitfinex were previously fined a combined 42.5 million by the commodity Futures Trading Commission (CFTC) in October 2021 for violation of the commodity Exchange Act and a prior CFTC order.

In a podcast with Good Morning Crypto, Ripple CEO Brad Garlinghouse commented that he believes the U.S. government’s scrutiny of Tether is unmistakable.

Given all these different sources that seem to concur on Tether's evildoings, it seems very hard not to believe in the claims and allegations that WSJ is making of Tether.

Market Reactions to all of Tether's allegations

The news of the investigation has sent ripples through the broader crypto markets, highlighting the volatility and regulatory sensitivities surrounding stablecoins.

Bitcoin fell from $67,367 to $66,016 and has also only partially recovered at the time of writing. Ether fell from $2,505 to $2,461. BNB, Solana, XRP, and other major cryptocurrencies showed similar behavior.