Tether has released a formal statement reprimanding Bloomberg’s reportage that revealed the company is facing investigation on bank frauds from the US Department of Justice .
According to the Bloomberg report, Tether is officially facing investigation on suspicions of bank frauds committed by the executives of the company. The possible frauds are said to have been committed during the formative years of the company. It has also been accused of lying about its business nature when it first started opening accounts around the globe.
Federal police officials have reportedly sent letters to the executives over the past few months informing them that they are under investigation. The Bloomberg report added that the agencies are investigating if Tether concealed any transactions related to cryptocurrencies.
Tether and its sister company Bitfinex exchange had to pay an $18.5 million fine to the New York Attorney General (NYAG) in February for settling an investigation after $850 million of commingled client and corporate funds went missing.
During its investigation with NYAG, the office revealed that the company sometimes had no funds to back up its stable coins, in turn misleading their clients about liquidity issues.
The company released a formal statement on its website criticizing the news outlet ‘Bloomberg’ for repeatedly discrediting Tether. The statement said:
“Today, Bloomberg published an article based on unnamed sources and years-old allegations, patently designed to generate clicks. This article follows a pattern of repackaging stale claims as “news.” The continued efforts to discredit Tether will not change our determination to remain leaders in the community.”
The company did not deny the allegations anywhere in its statement. It said:
“Tether routinely has open dialogue with law enforcement agencies, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency, and accountability. We are proud of our role as industry leaders in promoting cooperation between industry and government authorities in the U.S. and around the world. We remain committed to our customers and the industry-leading technology and transparency that has led to our growth.
It is business as usual at Tether, and we remain focused on how to best serve the needs of our customers.”
Tether is the largest stablecoin in terms of capitalization, with more than $62 billion worth of stablecoins in circulation. If the criminal charges are to be true, it would have serious consequences on the market.