Federal investigators probe Tether

Posted by dcgudeman 10/25/2024

Federal investigators probe Tether(www.wsj.com)

116 points | 117 commentspage 2

wmf 10/25/2024|

I don't know why, but the one thing cryptobros fear is OFAC. They shrug off fraud, securities violations, and money laundering but when sanctions are mentioned people start running away. We saw this with Tornado Cash and hopefully Tether will get OFACed next.

BTW, Tether probably is backed 1:1 or better because they bought $XXB of US treasury bonds at >4% which return billions in profit per year. BTC is also (currently) near all time highs. Whatever hole they had was probably filled in.

seper8 10/25/2024|

[flagged]

domoregood 10/25/2024||

https://archive.is/bCRd3

yobid20 10/25/2024||

Jesus only 6 or 7 years late! It was OPENLY KNOWN and ADMITTED IN COURT they never had the cash backing and were just printing tokens to inflate prices. Why start an investigation now?

TacticalCoder 10/25/2024|

AIUI it's not an investigation about whether tether has the USDT or not but an investigation as to whether or not allowed customers to launder dirty money.

Tether is in a country that has a long history of doing monkey business, including monkey business with drug trafficking money and arms trafficking money. Even the CIA was tied to that monkey business.

To me there's zero doubt there's actual money laundering ongoing and I really wouldn't be surprised if, once again, some three letter agencies were implicated in monkey bahamian business.

FireBeyond 10/26/2024||

> Tether is in a country that has a long history of doing monkey business, including monkey business with drug trafficking money and arms trafficking money.

I never forget the farcical interview with Deltec Bank's "Deputy CEO":

At the start of 2021, according to their website, it was a 55 year old bank. By the end of 2021, it was a 70 year old bank!

The bank's website is a WordPress site. And their customers must be unhappy - online banking hasn't worked for nearly two years at this point - take a look at the HTML source, there's no way it could actually work.

Anyway, their Deputy CEO gave this hilarious interview from his gaming rig. A 33 year old Deputy CEO, who by his LinkedIn claimed to have graduated HEC Lausanne in Switzerland with a Master of Science at the age of 15... celebrating his graduation by immediately being named Professor of Finance at a university in Lebanon. While dividing his spare time between running hedge funds in Switzerland and uhh... Jacksonville, FL.

The name of his fund? Indepedance [sic] Weath [sic] Management. Yeah, okay.

In this hilariously inept interview, he claimed that people's claims about Deltec's money movements being several times larger than all the banking in their country was due to them misunderstanding the country's two banking licenses, the names of which he "couldn't remember right now" (the Deputy CEO of a bank who can't remember the name of the banking licenses where they operate), and he "wasn't sure which one they had, but we might have both".

Once the ridicule and all this started piling on, within 24 hours, he was removed from the bank's website leadership page. When people pointed out how suspicious that looked, he was -re-added-.

The bank then deleted the company's entire website and replaced it with a minimally edited WordPress site, where most of the links and buttons were non-functional and remained so for months thereafter.

I mean fuck it, if the cryptobros want to look at all that and say "seems legit to me", alright, let em.

alchemist1e9 10/25/2024||

https://x.com/paoloardoino/status/1849876338573799912

CEO of Tether - “As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”

JumpCrisscross 10/25/2024||

U.S. attorneys are under no obligation to tell people they are investigating that they are under investigation. That doesn't prove the Journal's assertion. But it's nonsense to the point of suspicion to conclude from not having been noticed that there is no investigation.

Bluescreenbuddy 10/25/2024|||

Going to screenshot that incase it ages like milk.

paulpauper 10/25/2024||

yup. his words mean little

dogmayor 10/25/2024|||

Yeah that's not how investigations work. USAOs don't publicize ongoing investigations for obvious reasons. Once they wrap up an investigation but before convening a grand jury to indict, they may send a target letter, but they typically don't. Most often, people don't find out until they're indicted.

alchemist1e9 10/25/2024||

https://x.com/paoloardoino/status/1849930663278833822

Tether CEO additional statement on X - “At Tether, we deal regularly and directly with law enforcement officials to help prevent rogue nations, terrorists and criminals from misusing USDt. We would know if we are being investigated as the article falsely claimed. Based on that, we can confirm that the allegations in the article are unequivocally false.”

dogmayor 10/26/2024||

Again, that's not how it works. They wouldn't know if they're being investigated unless the USAO told them. And if the USAO had told them they're a target of an investigation then they'd say that instead of this garbage quote. Hell they may even be working with the sdny on some investigations, but in no way does that mean they would know if they themselves are the subject of another investigation. In other words, unless Tether is somehow working with the investigators on an investigation into Tether, Tether wouldn't know they're being investigated.

paulpauper 10/25/2024||

"trust me bro"

Someone tipped off the WSJ, and more will probably be developing

Terretta 10/26/2024||

The U.S. federal government is investigating Bureau of Engraving and Printing's "US Dollar" notes for possible violations of sanctions and anti-money-laundering rules, according to people familiar with the matter.

The criminal investigation, run by prosecutors at the Manhattan U.S. attorney’s office, is looking at whether notes "tethered" to the Federal Reserve's "dollar" have been used by third parties to fund illegal activities such as the drug trade, terrorism and hacking—or launder the proceeds generated by them.

The Treasury Department, meanwhile, has been considering sanctioning the Federal Reserve because of the Bureau of Engraving and Printing's currency notes' widespread use by individuals and groups sanctioned by the U.S., including the terrorist group Hamas and Russian arms dealers. Sanctions against the Federal Reserve would generally prohibit Americans from doing business using the notes.

paulpauper 10/25/2024||

This is just another example of how shorting Bitcoin during market hours is such an effective strategy, which is as profitable now at $60k as it was at $20k. This takes advantage of the tendency of bad news to drop when the stock market is open. Federal government offices are closed on weekends, so if bad news is dropped or a rumor of bad news, it will be on a weekday and when the market is open, as has been the case.

Good news can also drop, but there is a major asymmetry favoring bad news and liquidations, and consequently sudden drops of the Bitcoin price. You don't have to work at a hedge fund to find great methods like this.

It also shows why Bitcoin is an inferior investment compared to tech stocks, in which investors do not have to worry about these regulatory risks (except for antitrust, which is a slow, drawn-out process and this can be mitigated with diversification). QQQ has far outperformed Bitcoin even as far back as 2020.

charliebwrites 10/25/2024||

My unsubstantiated conspiracy theory on this is that not only is Tether not backed 1:1 USD > USDT but that they are so disproportionately not backed that they basically printed money during the peak of the pandemic, causing real measurable inflation in the crypto markets

daft_pink 10/25/2024||

deleted. I have to figure out the exact agency and repost sorry. I thought it was the sec, but I am wrong.

JumpCrisscross 10/25/2024|

> Tether effectively evaded future SEC oversight by withdrawing from the U.S. market and operating outside U.S. jurisdiction

U.S. "jurisdiction is triggered when a payment in U.S. dollars [takes] place and the U.S. financial system [is] used" [1].

EDIT: Tether withdrew from New York State's jurisdiction as part of its settlement with the New York AG [2], not to be confused with the U.S. attorney based in Manhattan.

[1] https://www.ziv.unibe.ch/unibe/portal/fak_rechtwis/c_dep_pri...

[2] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

cryptica 10/25/2024|

If Tether is a fraud then the entire financial system is clearly a fraud as well. What kind of financial system allows a fraud of this size to continue for over a decade? Let me guess, nobody knew anything. Yet the government knows about every transaction over $600 on all our accounts. It's clown world.

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