US DOJ Revive Probe Into Fraud Cases Involving Tether Officials
According to multiple reports, the United States Department of Justice (DOJ) has reopened its investigations involving fraud cases by executives of USDT issuers, Tether, during the early days of the stablecoin.
Federal Prosecutors Scrutinize Top Tether Officials
According to Bloomberg, the latest development indicates that the DOJ will hand over the investigation to another team headed by Attorney Damian Williams from the Southern District of New York.
Per Bloomberg, in July 2021, federal prosecutors in Washington were probing the involvement of Tether executives in the fraudulent representation of transactions. The DOJ alleged that Tether officials hid the details of crypto transactions from the authorities during the early days of USDT’s business.
The case remained a long-drawn legal battle and was transferred to another team in the DOJ familiar with the matter. However, Bloomberg quoted former federal prosecutors who opined that transferring an investigation to another unit is pretty rare after some initial progress.
They added that this underscores the uncertain legal process in the developing digital currency ecosystem.
According to them:
“The transfer of cases does not happen often, and there will be some unique conditions before something of this nature is pulled off.”
According to Robertson Park, a former fraud expert at DOJ, this does not just happen on the fly; some pretty circumstances pave the way for transferring cases as necessary as the current one.
Tether Debunks Report
Tether has defended itself from the new development involving its officials and the DOJ. The company released a blog post earlier in the week slamming the media reports and saying that the probe report was false.
The stablecoin issuer further noted that Bloomberg’s report is inaccurate and represents another example of poor journalism. Meanwhile, Tether admitted that it, alongside Bitifinex, its sister company, is named as a victim in the Fowler case referenced by Bloomberg.
The Bloomberg report revealed that in 2019, federal prosecutors started filing charges against Reginald Fowler, alleging that the culprit operated multiple bank accounts in the United States. Moreover, the report also stated that Fowler claimed the accounts were for real estate investments.
Reports making the rounds indicate that in 2021, Tether and Bitifinex splashed $18.5 million to resolve issues involving the New York Attorney General’s Office (AOG). The payment is to settle the investigation and hid other disclosures relating to the two companies. The USDT stablecoin has a market valuation of more than $69 billion following a significant slump from its all-time high of almost $84 billion.
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